Optimal Corporation Tax: An I.O. Approach

22 Pages Posted: 11 Jul 2008

See all articles by Luca Colombo

Luca Colombo

Trinity College (Dublin) - Institute for International Integration Studies (IIIS)

Paola Labrecciosa

affiliation not provided to SSRN

Patrick Paul Walsh

Institute for the Study of Labor (IZA); UCD

Multiple version iconThere are 2 versions of this paper

Date Written: February 2006

Abstract

Theory predicts that optimal effective corporation tax rates will be negatively related to industry specific sunk costs, and hence industry concentration. Governments should tax industries with monopolistic power softly. Evidence suggests that this Schumpeterian (1942) principle of corporate taxation was used widely across industries in France, Italy and the UK in the 1990s.

JEL Classification: H25, and, L52

Suggested Citation

Colombo, Luca and Labrecciosa, Paola and Walsh, Patrick Paul, Optimal Corporation Tax: An I.O. Approach (February 2006). LSE STICERD Research Paper No. EI42. Available at SSRN: https://ssrn.com/abstract=1158319

Luca Colombo

Trinity College (Dublin) - Institute for International Integration Studies (IIIS) ( email )

The Sutherland Centre, Level 6, Arts Building
Trinity College
Dublin 2
Ireland

Paola Labrecciosa

affiliation not provided to SSRN

No Address Available

Patrick Paul Walsh

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

UCD ( email )

University College Dublin
Belfield, Dublin Dublin 4
Ireland

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