CORPORATE TAX RATE-REVENUE RELATION: THE CASE OF OECD

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In the process of globalization, governments have lowered the rates of corporate taxes to attract foreign capital, especially after the 1980s. However, despite the declining rates of corporate tax, corporate tax revenues have displayed a relatively stable, even increasing tendency. This situation, which is referred to in the literature as the rate of corporation tax rate-income paradox, is explained by the increase in the level of corporatization of companies and a shift towards the taxation of corporations from income tax. The inverse relationship between corporate tax rate and revenue affects the design of tax systems. Today, many countries are inclined to make a preference between income tax and corporation tax and organize their tax systems accordingly. For this reason, the validity of the corporate tax paradox is an important issue that affects the tax policies of countries. Because of this importance, the validity of tax paradox is examined in the study. In this study, nonlinear regression technique was used for examining this paradoxical relationship. According to the results of the analysis, it was determined that the Laffer curve was valid in terms of the corporate tax, and it was determined that the ratio of maximizing the tax incomes of the corporations was 34 %. This result is very important in terms of empirical confirmation of recent changes in corporate taxation and shaping the design of tax policy.

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Corporate Tax Revenue , Corporate Tax Rate , Revenue Paradox , Laffer Curve , Panel Data

Abant Sosyal Bilimler Dergisi

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Abant Sosyal Bilimler Dergisi