Macroeconomic effects of corporate tax policy
Journal
Journal of Accounting and Economics
Subject
Accounting
Publishing details
Authors / Editors
Shevlin T J;Shivakumar L;Urcan O
Biographies
Publication Year
2019
Abstract
Prior studies on the relation between corporate taxes and future macroeconomic growth present contradictory evidence. We argue this mixed evidence is at least partly due to the use of statutory corporate tax rates which ignore the complexity of tax exemptions, tax deductions, tax enforcement and firms’ tax planning. We propose an alternative tax rate measure that aggregates cash effective tax rates of listed firms, which reflect not only statutory tax rates, but also other features of the tax code, enforcement, and firm's tax planning. We find a strong robust negative relation between country-level effective tax rates and future macroeconomic growth.
Publication Notes
Corporate tax policy; Macroeconomic growth; Investment efficiency
Available on ECCH
No