Multinational production and corporate taxes: A quantitative assessment

• 成果类型: Article
• 署名作者: Wang, Zi
• 署名单位: Shanghai University of Finance & Economics
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103353
• 发表日期: 2020
• 关键词: Multinational production; corporate tax; Tax competition; Tax cooperation

摘要

I study the welfare implications of corporate taxation in the presence of multinational production (MP) to understand the consequences of international tax competition and cooperation. I build a quantifiable general equilibrium model with trade. MP, and salient features of international corporate tax system. The model delivers structural equations that can be used to estimate the key parameters governing the response of firms' production locations to changes in corporate tax rates. Calibrating the model to data on 28 countries, I find that the US. corporate tax reform in 2017 increases the U.S. real income by about 1% but decreases the average real income of other countries by 0.075%. In a non-cooperative tax game, each country has strong incentives to lower its corporate tax rate on domestic firms in order to gain from firm relocation at the expense of other countries, which leads to welfare losses in participation countries. International tax cooperation can increase the real income in each participation country by about 1%. (C) 2020 Elsevier B.V. All rights reserved.