| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP17526 |
| DP17526 Tax Wedges, Financial Frictions and Misallocation | |
| Arpad Abraham; Piero Gottardi; Joachim Hubmer; Lukas Mayr | |
| 发表日期 | 2022-08-01 |
| 出版年 | 2022 |
| 语种 | 英语 |
| 摘要 | We revisit the classical result that in a closed economy the incidence of corporate taxes on labor is approximately zero. We consider a rich general equilibrium framework, where agents differ in the level of their wealth as well as in their managerial and working ability. Potential entrepreneurs go through all the key decisions affected by corporate tax changes: the choice of (i) occupation, (ii) organizational form, (iii) investment, and (iv) financing structure. We allow both for the presence of financial frictions and the traditional tax advantage of debt over corporate equity, which jointly generate misallocation of capital and talent. In this environment we characterize the effects of increasing corporate taxes both analytically and for a calibrated version of the model. We show that this tax increase reallocates production from C corporations to pass-through businesses. Since, due to distorted prices, the latter have higher capital-labor ratios, this reallocation generates a reduction in labor productivity and wages. Furthermore, the corporate tax increase induces some C corporations to reorganize as pass-throughs, which implies more restricted access to external funds and thus a socially inefficient downsizing of production in these firms. Finally, the tax increase causes further misallocation of talent by inducing agents with low wealth relative to their managerial talent to switch from entrepreneurship to being workers, while the reverse happens for agents with higher wealth and lower managerial skills. Overall, we find that both labor and capital bear a large share of the corporate tax incidence, while entrepreneurs are net beneficiaries of the tax change. |
| 主题 | Financial Economics ; Macroeconomics and Growth ; Public Economics |
| URL | https://cepr.org/publications/dp17526 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/546611 |
| 推荐引用方式 GB/T 7714 | Arpad Abraham,Piero Gottardi,Joachim Hubmer,et al. DP17526 Tax Wedges, Financial Frictions and Misallocation. 2022. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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