The Effective Tax Burden of Companies and on Highly Skilled Manpower: Tax Policy Strategies in a Globalized Economy

22 Pages Posted: 1 Jun 2005 Last revised: 6 Aug 2015

See all articles by Christina Elschner

Christina Elschner

ZEW – Leibniz Centre for European Economic Research

Lothar Lammersen

affiliation not provided to SSRN

Michael Overesch

Universität zu Köln

Robert Schwager

Center for European Economic Research (ZEW); University of Magdeburg

Date Written: 2005

Abstract

Company taxes and taxes on highly skilled labour both influence the attractiveness of a particular region as a location for investment. We measure the effective tax burden on capital investment and on highly qualified labour in 33 locations across Europe and the United States. We then correlate both types of tax burden in order to study the different tax policy strategies applied in different countries. We identify three causes for different strategies: political institutions, preferences for redistribution and equality, and the position in globalisation and growth. Small countries, high growth rates, and federal structure with high tax autonomy stand for countries with lower tax burdens, especially on companies. Large countries, representative democracies with coalitions, and a high preference for redistribution are likely to induce higher tax burdens.

Keywords: Effective tax burden, tax policy, company taxation, personal income tax

JEL Classification: H21, H24, H25

Suggested Citation

Elschner, Christina and Lammersen, Lothar and Overesch, Michael and Schwager, Robert, The Effective Tax Burden of Companies and on Highly Skilled Manpower: Tax Policy Strategies in a Globalized Economy (2005). ZEW - Centre for European Economic Research Discussion Paper No. 05-031. Available at SSRN: https://ssrn.com/abstract=732283 or http://dx.doi.org/10.2139/ssrn.732283

Christina Elschner (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Lothar Lammersen

affiliation not provided to SSRN

No Address Available

Michael Overesch

Universität zu Köln ( email )

Albertus-Magnus-Platz
WiSo-Gebäude
Cologne, 50923
Germany
0221/470-5605 (Phone)

HOME PAGE: http://www.steuer.uni-koeln.de/

Robert Schwager

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany
00 49 621 1235160 (Phone)
00 49 621 1235215 (Fax)

University of Magdeburg

Universitätspl. 2
PSF 4120
Magdeburg, D-39106
Germany

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