Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127567
Authors: 
Fuest, Clemens
Peichl, Andreas
Siegloch, Sebastian
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9606
Abstract: 
This paper estimates the incidence of corporate taxes on wages using a 20-year panel of German municipalities. Administrative linked employer-employee data allows estimating heterogeneous worker and firm effects. We set up a general theoretical framework showing that corporate taxes can have a negative effect on wages in various labor market models. Using an event study design, we test the predictions of the theory. Our results indicate that workers bear about 40% of the total tax burden. Empirically, we confirm the importance of both labor market institutions and profit shifting possibilities for the incidence of corporate taxes on wages.
Subjects: 
business tax
wage incidence
administrative data
local taxation
JEL: 
H2
H7
J3
Document Type: 
Working Paper

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