Data and Code for: Corporate Taxation Under Weak Enforcement

Principal Investigator(s):  View help for Principal Investigator(s) Pierre Bachas, World Bank Research; Mauricio Soto, SuperIntendency of Pensions Costa Rica

Version:  View help for Version V1

Name File Type Size Last Modified
Analysis_microdatos_161107.do text/x-stata-syntax 7.1 KB 02/29/2016 09:29:AM
Appendix_OptimalTax_DataCreation.do text/x-stata-syntax 3.1 KB 10/05/2020 09:51:AM
Appendix_OptimalTax_Figure.do text/x-stata-syntax 5.6 KB 10/06/2020 01:06:AM
Appendix_OptimalTax_simulation_OneRate.do text/x-stata-syntax 7.7 KB 12/18/2020 12:30:AM
Appendix_OptimalTax_simulation_TwoRate.do text/x-stata-syntax 8 KB 12/18/2020 12:21:AM
Assets.do text/x-stata-syntax 7 KB 10/06/2020 01:14:AM
Assets.xlsx application/vnd.openxmlformats-officedocument.spreadsheetml.sheet 43.1 KB 10/06/2020 11:27:PM
Bunching_T1.dta application/x-stata 25.1 KB 10/06/2020 11:26:PM
Corporate_tax_crosscountry.do text/x-stata-syntax 4.9 KB 11/11/2020 12:35:AM
Corporate_tax_practice_ICDT.do text/x-stata-syntax 10.4 KB 10/06/2020 05:28:AM
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Project Citation: 

Bachas, Pierre, and Soto, Mauricio . Data and Code for: Corporate Taxation Under Weak Enforcement. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-10-25. https://doi.org/10.3886/E120688V1

Project Description

Summary:  View help for Summary Paper: "Corporate Taxation Under Weak Enforcement"

Abstract: 
How should developing countries tax corporate income? We study this question in Costa Rica, where firms face higher average tax rates on profits when revenues marginally increase. We combine discontinuity and bunching designs to estimate the elasticity of taxable profit and separate it into revenue and cost elasticities. We find that firms faced with a higher tax rate slightly reduce revenues but considerably increase costs, thus producing a large elasticity of taxable profit of 3–5. In this context, the revenue-maximizing rate for a corporate tax on profit is below 25%, and we show that a tax policy that broadens the base while lowering the rate can almost double the tax revenue collected from these firms.

Scope of Project

JEL Classification:  View help for JEL Classification
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H26 Tax Evasion and Avoidance
      H32 Fiscal Policies and Behavior of Economic Agents: Firm
      O23 Fiscal and Monetary Policy in Development
Geographic Coverage:  View help for Geographic Coverage Costa Rica
Time Period(s):  View help for Time Period(s) 2008 – 2014


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V1 [2021-10-25]

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