Effective tax rates, endogenous mark-ups and heterogeneous firms
M Irlacher, F Unger - Economics Letters, 2018 - Elsevier
We provide a new explanation why the effective tax rate is smaller for larger firms, even in
the absence of common channels such as profit shifting and lobbying activities. This result
emerges in a heterogeneous firms model with endogenous markups based on Melitz &
Ottaviano (2008). Our framework features imperfect pass-through of corporate taxes into
prices and partial deductibility of production costs. Corporate taxes reduce mark-ups and
hence pre-tax profits, especially for high cost firms. As production costs are only partially …
the absence of common channels such as profit shifting and lobbying activities. This result
emerges in a heterogeneous firms model with endogenous markups based on Melitz &
Ottaviano (2008). Our framework features imperfect pass-through of corporate taxes into
prices and partial deductibility of production costs. Corporate taxes reduce mark-ups and
hence pre-tax profits, especially for high cost firms. As production costs are only partially …
以上显示的是最相近的搜索结果。 查看全部搜索结果