publication . Preprint . 2010

Corporate taxation and capital accumulation

Stephen Bond; Jing Xing;
Open Access
  • Published: 01 Jan 2010
Abstract
We present new empirical evidence that aggregate capital accumulation is strongly influenced by the user cost of capital and, in particular, by corporate tax incentives summarised in the tax-adjusted user cost. We use sectoral panel data for the USA, Japan, Australia and ten EU countries over the period 1982-2007. Our panel combines data on capital stocks, value-added and relative prices from the EU KLEMS database with measures of effective corporate tax rates from the Oxford University Centre for Business Taxation. Given the tax-adjusted user cost, we find little additional information in statutory corporate tax rates or effective average tax rates.
Subjects
ACM Computing Classification System: ComputingMilieux_GENERALComputingMilieux_LEGALASPECTSOFCOMPUTING
free text keywords: capital accumulation, user cost of capital, corporate taxation, jel:E22, jel:E62, jel:H25

Table 8: IV within-groups estimations, using tax components as instruments (1) (2) (3) (4) (5) Total capital Equipment Structures Total capital Equipment ∆ ln , ln −1 , ln −2 ln −1 , ln

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