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

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...

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Bibliographic Details
Published in:Fiscal studies 2006-12, Vol.27 (4), p.513-534
Main Authors: Elschner, Christina, Lammersen, Lothar, Overesch, Michael, Schwager, Robert
Format: Article
Language:English
Subjects:
Business structures
Comparative analysis
Corporate income taxes
Corporate profits
Corporate taxes
Effective tax rate
Employees
Enterprises
Europe
European Union
Fiscal policy
Globalization
H21
H24
H25
Human resources
Income taxes
Industrial buildings
Investment tax credits
Investments
Labor force
Labour force
Personal income taxes
Profitability
Skilled workers
Studies
Surcharges
Tax rates
Taxation
Taxes
Wages & salaries
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Summary: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 find that effective tax rates on companies and on highly skilled employees are closely correlated for a number of countries. Ireland and most new EU Member States impose relatively lower taxes on capital investment than on highly skilled manpower. Conversely, in the US, companies are taxed heavily but the effective tax rate on highly skilled employees is moderate.
ISSN:0143-5671
1475-5890
DOI:10.1111/j.1475-5890.2006.00044.x