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Mark‐up Pricing and the Forward Shifting of the Corporate Income Tax
Author(s) -
Daly Kevin,
Hart Neil
Publication year - 1994
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/j.1467-8462.1994.tb00847.x
Subject(s) - economics , income tax , international taxation , state income tax , gross income , order (exchange) , double taxation , monetary economics , public economics , microeconomics , tax reform , financial economics , finance
The framework used to test the hypothesis of forward income tax shifting is based on a simple mark‐up pricing model and follows the methodology of Beath (1979). In this framework indications of forward tax shifting are inferred if the gross mark‐up varies in order to achieve a targeted net of tax mark‐up. Empirical results derived support the hypothesis and suggest significant forward corporate income tax shifting in Australian manufacturing companies over the data period 1968 to 1990.