How Responsive are Firms to the Corporate Wealth Tax?
The corporate wealth tax is commonly associated with a non-optimal policy for fiscal revenue and efficiency. However, there is no empirical evidence regarding the behavioral response of firms to this tax. Taking advantage of the non-linearities introduced by the tax design in Colombia, this paper es...
- Autores:
-
Gómez, Camilo
- Tipo de recurso:
- Work document
- Fecha de publicación:
- 2019
- Institución:
- Universidad de los Andes
- Repositorio:
- Séneca: repositorio Uniandes
- Idioma:
- spa
- OAI Identifier:
- oai:repositorio.uniandes.edu.co:1992/41099
- Acceso en línea:
- http://hdl.handle.net/1992/41099
- Palabra clave:
- Corporate wealth tax
wealth tax base elasticity
Colombia
H25, H26, H32, D22
- Rights
- openAccess
- License
- http://creativecommons.org/licenses/by-nc-nd/4.0/
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Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores.http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2Gómez, Camiloa14c5545-96a7-490d-b141-cb2e6ac2fd6b4002020-07-28T17:16:17Z2020-07-28T17:16:17Z20191657-5334http://hdl.handle.net/1992/410991657-719110.57784/1992/41099instname:Universidad de los Andesreponame:Repositorio Institucional Sénecarepourl:https://repositorio.uniandes.edu.co/The corporate wealth tax is commonly associated with a non-optimal policy for fiscal revenue and efficiency. However, there is no empirical evidence regarding the behavioral response of firms to this tax. Taking advantage of the non-linearities introduced by the tax design in Colombia, this paper estimates the elasticity of corporate wealth with respect to the statutory tax rate and investigates the impact of the tax on reported assets, profits, and liabilities. Results reveal that, in years 2006 and 2010, we observe between 23.8% and 35.7% more firms at the wealth cutoffs where the tax rate changes. This implies estimated elasticities of 0.250 and 0.447 for firms with wealth around 3 billion pesos. Difference-in-differences analysis suggests that the reduction in reported wealth relates mostly to declines in assets and pre-tax profits, while no effects on liabilities are found. Absent fiscal externalities, the estimated elasticities are associated with a revenue loss and marginal deadweight loss of around 1% of fiscal revenue on the evaluated taxpayer firms. Once the negative impact on the corporate income tax is considered, these figures can be as high as 3.8%.39 páginasspaUniversidad de los Andes, Facultad de Economía, CEDEDocumentos CEDE No. 35 Septiembre de 2019https://ideas.repec.org/p/col/000089/017433.htmlHow Responsive are Firms to the Corporate Wealth Tax?Documento de trabajoinfo:eu-repo/semantics/workingPaperhttp://purl.org/coar/resource_type/c_8042http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttps://purl.org/redcol/resource_type/WPCorporate wealth taxwealth tax base elasticityColombiaH25, H26, H32, D22Facultad de EconomíaPublicationTHUMBNAILdcede2019-35.pdf.jpgdcede2019-35.pdf.jpgIM Thumbnailimage/jpeg9703https://repositorio.uniandes.edu.co/bitstreams/874ec288-944b-4b11-a5ba-0359caa065cb/downloada7359e98afb940d7cbe7c3eb99c881fdMD56ORIGINALdcede2019-35.pdfdcede2019-35.pdfapplication/pdf948767https://repositorio.uniandes.edu.co/bitstreams/446a00c0-11f7-4385-88b4-33f683bfc3a6/download7f20fa94fda3a0be13819ed2b1af1936MD53TEXTdcede2019-35.pdf.txtdcede2019-35.pdf.txtExtracted texttext/plain89895https://repositorio.uniandes.edu.co/bitstreams/c7e959e3-d804-481f-8f00-afe45268443f/downloade83109a742a58fafac21525becd07d6eMD551992/41099oai:repositorio.uniandes.edu.co:1992/410992024-06-04 15:30:15.423http://creativecommons.org/licenses/by-nc-nd/4.0/open.accesshttps://repositorio.uniandes.edu.coRepositorio institucional Sénecaadminrepositorio@uniandes.edu.co |
dc.title.none.fl_str_mv |
How Responsive are Firms to the Corporate Wealth Tax? |
title |
How Responsive are Firms to the Corporate Wealth Tax? |
spellingShingle |
How Responsive are Firms to the Corporate Wealth Tax? Corporate wealth tax wealth tax base elasticity Colombia H25, H26, H32, D22 |
title_short |
How Responsive are Firms to the Corporate Wealth Tax? |
title_full |
How Responsive are Firms to the Corporate Wealth Tax? |
title_fullStr |
How Responsive are Firms to the Corporate Wealth Tax? |
title_full_unstemmed |
How Responsive are Firms to the Corporate Wealth Tax? |
title_sort |
How Responsive are Firms to the Corporate Wealth Tax? |
dc.creator.fl_str_mv |
Gómez, Camilo |
dc.contributor.author.none.fl_str_mv |
Gómez, Camilo |
dc.subject.keyword.none.fl_str_mv |
Corporate wealth tax wealth tax base elasticity Colombia |
topic |
Corporate wealth tax wealth tax base elasticity Colombia H25, H26, H32, D22 |
dc.subject.jel.none.fl_str_mv |
H25, H26, H32, D22 |
description |
The corporate wealth tax is commonly associated with a non-optimal policy for fiscal revenue and efficiency. However, there is no empirical evidence regarding the behavioral response of firms to this tax. Taking advantage of the non-linearities introduced by the tax design in Colombia, this paper estimates the elasticity of corporate wealth with respect to the statutory tax rate and investigates the impact of the tax on reported assets, profits, and liabilities. Results reveal that, in years 2006 and 2010, we observe between 23.8% and 35.7% more firms at the wealth cutoffs where the tax rate changes. This implies estimated elasticities of 0.250 and 0.447 for firms with wealth around 3 billion pesos. Difference-in-differences analysis suggests that the reduction in reported wealth relates mostly to declines in assets and pre-tax profits, while no effects on liabilities are found. Absent fiscal externalities, the estimated elasticities are associated with a revenue loss and marginal deadweight loss of around 1% of fiscal revenue on the evaluated taxpayer firms. Once the negative impact on the corporate income tax is considered, these figures can be as high as 3.8%. |
publishDate |
2019 |
dc.date.issued.none.fl_str_mv |
2019 |
dc.date.accessioned.none.fl_str_mv |
2020-07-28T17:16:17Z |
dc.date.available.none.fl_str_mv |
2020-07-28T17:16:17Z |
dc.type.spa.fl_str_mv |
Documento de trabajo |
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http://purl.org/coar/version/c_970fb48d4fbd8a85 |
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info:eu-repo/semantics/workingPaper |
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http://purl.org/coar/resource_type/c_8042 |
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Text |
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https://purl.org/redcol/resource_type/WP |
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http://purl.org/coar/resource_type/c_8042 |
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1657-5334 |
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http://hdl.handle.net/1992/41099 |
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1657-7191 |
dc.identifier.doi.none.fl_str_mv |
10.57784/1992/41099 |
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instname:Universidad de los Andes |
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reponame:Repositorio Institucional Séneca |
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http://hdl.handle.net/1992/41099 |
dc.language.iso.none.fl_str_mv |
spa |
language |
spa |
dc.relation.ispartofseries.none.fl_str_mv |
Documentos CEDE No. 35 Septiembre de 2019 |
dc.relation.repec.spa.fl_str_mv |
https://ideas.repec.org/p/col/000089/017433.html |
dc.rights.uri.*.fl_str_mv |
http://creativecommons.org/licenses/by-nc-nd/4.0/ |
dc.rights.accessrights.spa.fl_str_mv |
info:eu-repo/semantics/openAccess |
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openAccess |
dc.format.extent.none.fl_str_mv |
39 páginas |
dc.publisher.none.fl_str_mv |
Universidad de los Andes, Facultad de Economía, CEDE |
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Universidad de los Andes, Facultad de Economía, CEDE |
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Universidad de los Andes |
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