Why Have Corporate Tax Revenues Declined? Another Look

28 Pages Posted: 26 Sep 2006

See all articles by Alan J. Auerbach

Alan J. Auerbach

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Multiple version iconThere are 3 versions of this paper

Date Written: August 2006

Abstract

The relative constancy of nonfinancial corporate tax revenues as a share of U.S. GDP masks offsetting trends in the ratio of corporate profits to GDP (declining) and the average tax rate (increasing). The average tax rate rose steadily between 1996 and 2003, an increase largely attributable to the importance of tax losses. This rise casts some doubt on the role of tax planning activities in reducing corporate taxes. So, too, does the relative stability of the rate of profit (relative to net assets), which might be expected to have declined had the understatement of profits for tax purposes been increasing.

Keywords: corporate profits, tax shelters, tax losses

JEL Classification: H25, G32

Suggested Citation

Auerbach, Alan Jeffrey, Why Have Corporate Tax Revenues Declined? Another Look (August 2006). CESifo Working Paper No. 1785. Available at SSRN: https://ssrn.com/abstract=932490

Alan Jeffrey Auerbach (Contact Author)

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
510-643-0711 (Phone)
510-643-0413 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
164
Abstract Views
1,236
rank
160,691
PlumX Metrics