Business tax , wage incidence , administrative data , local taxation
Abstract:
Because of endogeneity problems very few studies have been able to identify
the incidence of corporate taxes on wages. We circumvent these problems
by using an 11-year panel of data on 11,441 German municipalities' tax
rates, 8 percent of which change each year, linked to administrative matched
employer-employee data. Consistent with our theoretical model, we find a
negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities
yields a 77 cent decrease in the wage bill. The direct wage effect, arising
in a collective bargaining context, dominates, while the conventional indirect
wage effect through reduced investment is empirically small due to regional labor
mobility. High and medium-skilled workers, who arguably extract higher
rents in collective agreements, bear a larger share of the corporate tax burden.
Dieser Eintrag ist Teil der Universitätsbibliographie.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
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Do higher corporate taxes reduce wages? : Micro evidence from Germany. (deposited 02 Sep 2013 15:35)[currently selected]
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