277 research outputs found
Profit Shifting and ‘Aggressive' Tax Planning by Multinational Firms: Issues and Options for Reform
This paper discusses the issue of profit shifting and ‘aggressive’ tax planning by multinational firms. The paper makes two contributions. Firstly, we provide some background information to the debate by giving a brief overview over existing empirical studies on profit shifting and by describing arrangements for IP-based profit shifting which are used by the companies currently accused of avoiding taxes. We then show that preventing this type of tax avoidance is, in principle, straightforward. Secondly, we argue that, in the short term, policy makers should focus on extending withholding taxes in an internationally coordinated way. Other measures which are currently being discussed, in particular unilateral measures like limitations on interest and license deduction, fundamental reforms of the international tax system and country-by-country reporting, are either economically harmful or need to be elaborated much further before their introduction can be considered
Do higher corporate taxes reduce wages? : Micro evidence from Germany
Because of endogeneity problems very few studies have been able to identify
the incidence of corporate taxes on wages. We circumvent these problems
by using an 11-year panel of data on 11,441 German municipalities' tax
rates, 8 percent of which change each year, linked to administrative matched
employer-employee data. Consistent with our theoretical model, we find a
negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities
yields a 77 cent decrease in the wage bill. The direct wage effect, arising
in a collective bargaining context, dominates, while the conventional indirect
wage effect through reduced investment is empirically small due to regional labor
mobility. High and medium-skilled workers, who arguably extract higher
rents in collective agreements, bear a larger share of the corporate tax burden
Would a Flat Tax Stimulate Entrepreneurship in Germany?: A Behavioural Microsimulation Analysis Allowing for Risk
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