If the corporate income tax is set at a different rate from non-corporate income tax, it can play an important role in a firms choice of organizational form. The impact and interdependency of income tax incentives are crucial factors to take into account when designing efficient tax policies. In...

We model and estimate the incidence of the corporate income tax under imperfect competition. Identification comes from variation in effective marginal tax rates in the United States across industries and time. Our empirical results suggest that labor bears a significant portion of the burden of...

We use the population of UK corporation tax returns between 2001 and 2008 to estimate the elasticity of corporate taxable income with respect to the statutory corporation tax rate. We analyse bunching in the distribution of taxable income at two kinks in the marginal rate schedule. We find an...

In this Finance Act 2013 (FA 2013) note we review and discuss the implication of the temporarily increase in the level of the annual investment allowance (AIA) from £25,000 to £250,000 for expenditure incurred during the calendar years 2013 and 2014. We first review the provisions in detail,...

Does ownership affect the way firms react to corporate taxation? This paper exploits key features of recent corporate tax reforms in China to shed light on the differential impact of taxation on firms under different ownership regimes including private,collectively owned and state owned...

We develop a conceptual framework which captures the effect of the VAT system on profit by two effective taxes. This allows (i) predictions of the determinants of voluntary registration and bunching at the registration threshold; (ii) develops a formula for estimating the elasticity of...

In 2009, the United Kingdom changed from a worldwide to a territorial tax system, which exempts all active foreign business income from taxation. This reform abolished the dividend tax imposed on UK multinationals in many low-tax countries without affecting the dividend taxes on foreign...

With growing academic and policy interest in R&D tax incentives, the question about their effectiveness has become ever more relevant. In the absence of an exogenous policy reform, the simultaneous determination of companies' tax positions and their R&D spending causes an identification problem...

We examine the effect of incorporation in stimulating small business investment. Exploring a 2006 UK tax reform that lowered the tax gain to incorporation and reduced the after-tax internal funds for small companies, we present three main results. First, a one-percentage-point reduction in the...