Template-Type: ReDIF-Paper 1.0
Author-Name: Jarkko Harju
Author-Name-First: Jarkko
Author-Name-Last: Harju
Author-Name: Aliisa Koivisto
Author-Name-First: Aliisa
Author-Name-Last: Koivist
Author-Name: Tuomas Matikka
Author-Name-First: Tuomas
Author-Name-Last: Matikka
Title: The Effects of Corporate Taxes on Small Firms
Abstract: We study the impact of corporate taxes on firm-level investments and business activity
by exploiting a 6 percentage-point reduction in the corporate tax rate during 2012–2014 in
Finland. We use detailed administrative data and a difference-in-differences method comparing
small corporations (tax rate cuts) to similar partnerships (no change in taxes). We find no
significant average investment responses but do observe an average increase in annual sales and
variable costs. These effects are driven by more cash-constrained firms and firms where the
main owner actively works in the firm.

Length: 44 pages
Creation-Date: 2022-01
Publication-Status:  
File-URL: http://urn.fi/URN:ISBN:978-952-03-2273-1
File-Format: Application/pdf
File-Function: First version, 2022
Number: 2234
Classification-JEL:  G31, G38, H21, H25
Handle: RePEc:tam:wpaper:2234