Read on Twitter
Very happy to see our new article with Lukas Hakelberg out in @RIPEJournal. https://doi.org/10.1080/09692290.2020.1752769 . Short thread
2/ Why has the downward trend in capital taxes since the 1980s reversed for personal capital income but not for corporate profits? We argue that the answer is different levels of international policy change.
3/ The fight against evasion by households progressed significantly since 2009, culminating in multilateral, automatic exchange of information (AEI). In contrast, efforts against base erosion and profit shifting (BEPS) failed to curb tax avoidance by corporations.
4/ Hence, we theorize international cooperation as an intervening variable reducing the risk of capital flight and tax competition. Under such conditions, domestic political pressures in favor of higher capital taxes can unfold.
5/ We confirm our argument in a difference-in-difference analysis. In our central estimate the average tax rate on dividends in 2017 is 4.5 percentage points higher than it would have been absent international tax cooperation.
6/ Two implications: First, we need effective measures against corporate tax avoidance. Second, there is an alternative to both neoliberal globalization and right-wing populist protectionism: cooperative and embedded globalization.
7/ This is @COFFERSEU output. Thanks to @EU_H2020 funding. The ungated postscript version is available at @socarxiv here: https://doi.org/10.31235/osf.io/tvneu
