Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331615 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12149
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
As corporate income tax rates have fallen across the world, other capital taxes become more important. This paper studies the choice between income taxation at the corporate and shareholder level. I develop a sufficient-statistics framework to determine optimal tax reforms. The main result is that when the incidence of the corporate income tax on workers is higher than that of shareholder income taxes, lowering the former and reducing the latter is typically optimal. In a policy application, I derive optimal reform directions for corporate and shareholder income taxes for a large and a small economy.
Subjects: 
corporate income tax
dividend taxes
optimal capital taxation
JEL: 
F21
H21
H22
Document Type: 
Working Paper
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