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Corporate flat tax reforms and businesses' location choices : evidence from Switzerland

  • Galletta, Sergio Istituto di economia politica (IdEP), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera
  • Redonda, Agustin Council on Economic Policies (CEP), Zürich, Switzerland
    2016

32 p.

Corporate taxes
business location
flat-tax
tax reform
progressive taxation
English Profit taxation affects corporate investment decisions through several channels. This paper focuses on the impact of corporate income flat tax reforms on businesses' location choices. Since 1990, Swiss states (cantons) have been switching from a graduated to a flat tax rate scheme on profits. The paper assesses the effects of such a reform on the number of establishments by computing a difference-in-differences estimation. Our results show a negative impact on the number of firms in a given jurisdiction. Interestingly, the effect is considerably larger for riskier firms, suggesting the presence of an insurance effect from progressive taxation for risk- averse entrepreneurs.
Language
  • English
Classification
Economics
License
License undefined
Identifiers
  • RERO DOC 258143
  • ARK ark:/12658/srd1318658
Persistent URL
https://n2t.net/ark:/12658/srd1318658
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