Investment decisions and tax revenues under an allowance for corporate equity
In: Discussion paper 02-47
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In: Discussion paper 02-47
In: Discussion paper 02-46
In: ZEW Economic Studies 28
The tax burden on investment or companies is an important factor for the attractiveness of a country or a region. In particular, business location and investment decisions are influenced by the relative tax burdens encountered in different regions. This study presents estimates of the effective average and marginal tax rates on company investment for 143 regions in Europe and the USA. Using the approach pioneered by Michael Devereux and Rachel Griffith, it is shown that companies face a wide variation of effective tax burdens across European regions. The results are explained by analysing the importance of specific tax provisions for the tax burden at the various locations.
In: Gabler Edition Wissenschaft
In: Schriften zum Steuer-, Rechnungs- und Prüfungswesen
In: Gabler Edition Wissenschaft
In: Discussion paper 01,26
In: ZEW Discussion Paper 05-31
Company taxes and taxes on highly skilled labour both influence the attractiveness of a particular region as a location for investment. We measure the effective tax burden on capital investment and on highly qualified labour in 33 locations across Europe and the United States. We then correlate both types of tax burden in order to study the different tax policy strategies applied in different countries. We identify three causes for different strategies: political institutions, preferences for redistribution and equality, and the position in globalisation and growth. Small countries, high growth rates, and federal structure with high tax autonomy stand for countries with lower tax burdens, especially on companies. Large countries, representative democracies with coalitions, and a high preference for redistribution are likely to induce higher tax burdens.
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In: ZEW-Dokumentation 03,01