Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter June 4, 2008

Closer Economic Integration and Corporate Tax Systems

  • Kimberly A Clausing
From the journal Global Economy Journal

This article investigates two aspects of corporate income taxation: the determinants of corporate tax rates and the determinants of corporate tax revenues. In the context of theoretically informed empirical models, the analysis examines the influence of increasing economic integration on corporate tax rates and corporate tax revenues, focusing in particular on the case of European Union member and applicant countries. The investigation utilizes a data set of 36 OECD and European countries over the period from 1979 to 2002. Findings are consistent with theoretical expectations: more integrated countries chose lower corporate tax rates, while larger countries, those with bigger governments, and those with higher individual income tax rates chose higher rates. Corporate tax revenues are found to be parabolically related to tax rates. Further, this parabolic relationship is steeper as economies are more integrated, implying a lower revenue-maximizing tax rate for such countries.

Published Online: 2008-6-4

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

Downloaded on 29.3.2024 from https://www.degruyter.com/document/doi/10.2202/1524-5861.1359/html
Scroll to top button