Taxes, Organizational Form, and the Deadweight Loss of the Corporate Income Tax

16 Pages Posted: 30 Jun 2000 Last revised: 14 Nov 2022

See all articles by Austan Goolsbee

Austan Goolsbee

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: September 1997

Abstract

By changing the relative gain to incorporation, corporate taxation can play an important role in a firm's choice of organizational form. General equilibrium models have shown that substantial shifting of organizational form in response to tax rates implies a large deadweight loss of taxation. This paper estimates the impact of taxes on organizational form using data from 1900-1939. The results indicate that the effect of taxes is significant but small. A corporate rate increase of .10 raises the non-corporate share of capital .002-.03. The implied deadweight loss of the corporate income tax is around 5-10% of revenue.

Suggested Citation

Goolsbee, Austan, Taxes, Organizational Form, and the Deadweight Loss of the Corporate Income Tax (September 1997). NBER Working Paper No. w6173, Available at SSRN: https://ssrn.com/abstract=225931

Austan Goolsbee (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-5869 (Phone)
773-702-0458 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
84
Abstract Views
3,293
Rank
593,031
PlumX Metrics