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Country characteristics and the incidence of capital income taxation on wages: An empirical assessment
Author(s) -
Azémar Céline,
Hubbard R. Glenn
Publication year - 2015
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12179
Subject(s) - economics , wage , labour economics , capital (architecture) , tax incidence , demographic economics , international taxation , public economics , tax reform , history , archaeology
This paper examines the incidence of corporate income taxes on wages using data from the US Bureau of Labor Statistics for 13 OECD countries. Within a wage‐bargaining framework, our econometric analysis shows that a substantial share of the corporate tax burden is shifted from capital to labour. However, the magnitude of this shift is influenced importantly by country characteristics affecting the process of wage determination, such as the degree of capital mobility, a country's relative influence over the world price of output and trade unions’ strength.