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Title:Corporate taxation and the impact of governance, political and economic factors PDF Logo
Authors:Gérard, Marcel
Ruiz, Fernando M. M.
Issue Date:2009
Series/Report no.:CESifo working paper 2904
Abstract:In this paper we first use two international data sets to investigate how governance, political and economic factors influence corporate tax rates. We show that institutional and political factors matter: good governance reduces the tax rate; a parliamentary system, especially a plurality election system, and religious or nationalist executives too, push tax rates upward. Traditional variables also matter: economic openness has a negative effect on tax rates although market size has a positive one. Though it is not robust, interaction among neighbors also plays a role. Then we turn to theory and extend a standard model of tax competition to provide a channel for the elements set forth so far to influence tax rates formation; nested in the economic theory of lobbying that exercise provides our empirical investigation with theoretical foundations.
Subjects:institutions and taxation
tax competition
lobbying
JEL:H73
H70
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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