Options
The Role of Corporate Taxation in a Large Welfare State
Journal
Swiss Journal of Economics and Statistics
ISSN
0303-9692
Type
journal article
Date Issued
2009-08-19
Author(s)
Abstract
In comparing the impact of corporate taxation and social insurance on foreign direct investment (FDI) and unemployment, the paper derives four main results: (i) the optimal size of the welfare state depends on the degree of risk-aversion, the unemployment rate and the excess burden of labor taxes. Unemployment partly reflects the country's exposure to globalization; (ii) corporate taxation and social insurance can have equivalent effects on unemployment and outbound FDI; (iii) while an increase in the corporate tax raises corporate tax revenue, it is likely to worsen total fiscal stance; (iv) a corporate tax should be used to contribute to welfare state financing only in exceptional cases.
Language
English
Keywords
Corporate tax
foreign direct investment
unemployment
welfare state.
HSG Classification
contribution to scientific community
Refereed
No
Publisher
Peter Lang
Number
145
Start page
441
End page
450
Pages
10
Subject(s)
Eprints ID
55569