Taxation

One of the most enduring political economy puzzles of the past 40 years in the United States is why so many ordinary Americans support tax cuts for the rich. This paper aims to unpack this puzzle by providing new experimental evidence on what drives Americans’ preferences for cutting the top rate of federal income tax.

This paper examines how tax incentives lower effective tax rates and how they vary with firm size. This is important because tax incentives generate a government revenue loss, can distort firms’ production, and may exacerbate inequality. We also use our estimates of effective tax rates to assess the potential impact of a Global Minimum Tax.

How has cross-border integration affected the relative taxation of labour and capital historically and globally? And which countries have been most affected by the erosion of effective capital taxation, and why? Answering these questions is critical to shed light on the macroeconomic effects and long-run social sustainability of globalisation.

The optimal tax system amplifies the redistributive effects of prices rather than offsetting them, and that this amplification is stronger when we consider the endogenous response of markets.

The authors devise a method to simulate the impact of COVID-19 triggered lockdowns on the profits of formal-sector firms, using available corporate tax records. They focus on ten lower-income countries, for which data is typically scarcer.