This paper investigates the relationship between corporate income tax rates (CITR) and firm-level productivity growth using AMADEUS data of 304,410 observations from 79,842 European firms from 2006 to 2019. The results imply a robust non-linear relationship: higher CITRs are positively...

We study the optimal taxation of corporate and dividend income when entrepreneurs can use retained earnings to reduce their tax burden. We show that eliminating dividend taxes while increasing the corporate income tax (CIT) to keep investment unchanged raises total tax revenue. Our simulations...

In recent years, a growing number of countries have enacted tax rules that require multinational enterprises (MNEs) to document their intra-firm trade prices and show that they are set as in third-party trade. The objective of these rules is to limit opportunities for strategic trade mis-pricing...

Although citizens value competitive markets and support small businesses, we observe substantial variation in market concentration. Why do politicians abstain from taking action to reduce concentration? We propose an often overlooked political benefit to concentrated markets: When concentration...

How do corporate tax systems shape the boundaries of the firm? This paper shows that nonlinear corporate income taxation can distort firms' organizational structures by inducing tax-motivated firm splitting. I use administrative data on corporations and their owners and exploit two reforms that...