Thursday, April 9, 2009
Douglas Shackelford (University of North Carolina, Kenan-Flagler Business School) presents Corporate Income Tax Burdens at Home and Abroad (with Kevin Markle (University of North Carolina, Kenan-Flagler Business School)) at Northwestern today as part of its Advanced Topics in Taxation Series organized by Tom Brennan and Charlotte Crane. Here is the abstract:
To our knowledge, this paper provides the most comprehensive analysis of firm-level corporate income tax burdens to date. We use publicly available financial statement information to estimate firm-level average effective tax rates (AETRs) for 10,642 corporations from 85 countries from 1988 to 2007. We find that, on average, AETRs declined by six percentage points or 18% over the period with much of the decline occurring from 1992 to 1994. German, Japanese, Australian and Canadian decreases were large. American, British, and French declines were more modest. Nonetheless, because AETRs were falling worldwide, the ordinal rank from high-tax countries to low-tax countries changed little. Japanese firms always faced the highest AETRs. The AETRs for tax havens and countries from the Middle East and Asia (ignoring Japan) were always lower than those for the U.S. and European countries. Multinationals and companies operating in only one country had similar AETRs. These findings should provide some empirical underpinning for ongoing policy debates about the taxation of multinational profits.