Bachas, P., "Globalization and Factor Income Taxation"
Wednesday, May 17, 2023
Title: "Globalization and Factor Income Taxation"
Speaker: Assistant Professor Pierre Bachas, ESSEC-Business School
Host: Professor Nikolas Topaloglou, Department of International and European Economic Studies, Athens University of Economics and Business
Time: 15.30 -17.00
Attachments: PDF of Relevant Paper
Abstact: Exploiting a new global macro-historical database of effective tax rates, we uncover an intriguing pro-tax-capacity effect of international trade. While effective capital tax rates have fallen in developed countries, they have risen in developing countries since the mid-1990s. Event studies of trade liberalization shocks and instrumental variable regressions show that a significant share of this rise can be explained by trade integration, which increases the share of output produced in large corporations, where capital is easier to tax. In contrast to a widely held view, globalization appears in many countries to have supported the ability of government to tax capital.