Corporate taxation is a key area of policymaking. It will be at the heart of many economic policies in the years to come to bring tax revenues or incentivize firms' behavior, in particular in the context of the European Green Deal...
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Información proyecto U-CORP-TAX
Duración del proyecto: 23 meses
Fecha Inicio: 2023-04-01
Fecha Fin: 2025-03-31
Fecha límite de participación
Sin fecha límite de participación.
Descripción del proyecto
Corporate taxation is a key area of policymaking. It will be at the heart of many economic policies in the years to come to bring tax revenues or incentivize firms' behavior, in particular in the context of the European Green Deal. However, little is known about how firms react to changes in the corporate tax environment, especially when it comes to micro-level evidence. Among all firms, the reaction of large ones is of key importance because they account for an important share of economic activity and have more margins of adaptation than smaller firms. In particular, they can move their profits to tax havens to decrease their tax bill. More empirical evidence is needed to understand how corporate taxation affects these firms. To evaluate the impact of future reforms, it is crucial to know how firms will react on different margins: the level of production, the wages they pay, their investment, the location of their profits. Knowing the elasticity of these variables to taxation is key to understanding corporate tax reforms and will contribute to knowledge-based policymaking. The importance of these reactions cannot be overstated: they affect public finance and the provision of public goods, have macroeconomic impacts and have political and distributional consequences. U-CORP-TAX aims to contribute empirically and theoretically to understanding large firms’ responses to corporate taxation. To do so, U-CORP-TAX will leverage a unique research design, the exceptional additional taxation of large firms in France from 2011 to 2016. I will first merge administrative datasets providing precise firm-level data on profits, employment, investment, and wages. I will then use frontier causal inference methods to explore firms' responses to taxes on different margins. Finally, I will build a theoretical framework to interpret the empirical results and provide additional results about the distributional effects of corporate taxes.