search query: @indexterm Competition / total: 3278
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Author: | Overesch, M. Rincke, J. |
Title: | What drives corporate tax rates down? A reassessment of globalization, tax competition, and dynamic adjustment to shocks |
Journal: | Scandinavian Journal of Economics
2011 : VOL. 113:3, p. 579-602 |
Index terms: | Europe company taxation competition |
Freeterms: | openness |
Language: | eng |
Abstract: | The driving forces behind the recent decrease of corporate tax rates in Europe are reassessed. Based on data for even 32 countries from 1983 to 2006, analyzed are the roles of economic and financial openness and tax competition (herein as: cmptn.), while allowing for dynamic adjustment to shocks and period- and country-specific effects. It is suggested that countries compete strongly over statutory tax rates. Yet, there is no evidence that countries with increased openness would have more reduced tax rates. Based on a tax rates simulation, it is suggested that, in the absence of tax cmptn., the mean statutory tax rate of Western European countries in 2006 would have been about 12.5 percentage points above its actual level. It is concluded that tax cmptn. has mainly caused the recent downward trend in corporate taxes. |
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