Corporate Tax Overview

Principles

Definition

Corporate tax is an academic concept and field of study concerned with the theoretical and practical aspects of taxes levied by governments on corporate profits or income. Research in this area analyzes the principles, design, administration, incidence, compliance, and economic consequences of such taxation, drawing insights from public finance, economics, law, and accounting disciplines.

Ontological type

International Taxation

Incidence and Efficiency

Tax Base and Rates

Key developments

Key Figures

Tax-Driven Capital Structure era

Sheridan Titman[1] was a central figure in the Tax-Driven Capital Structure era (1974–2000), with affiliations to the American Finance Association[2] and Stanford University[3]. His key contribution in this era is the 1988 paper The Determinants of Capital Structure Choice[4], which helped formalize the determinants of capital structure and highlighted the role of tax considerations in leverage decisions. Sheridan Titman[1] continued to influence research in this era through ongoing work associated with the American Finance Association[2] and Stanford University[3]. The Determinants of Capital Structure Choice[4] remains a foundational reference for understanding how tax incentives shape leverage decisions in corporate finance during this era.

Governance-Driven Tax Planning era

Dhammika Dharmapala [1] is a scholar affiliated with Harvard University [3] and Stanford University [4] during the Governance-Driven Tax Planning era. In the paper Corporate tax avoidance and high-powered incentives [6], Dhammapala shows that high-powered incentives systematically shape tax avoidance, underscoring governance and incentive design as central drivers in this era. Mihir A. Desai [2] is a scholar affiliated with Harvard University [3] and the University of California, Davis [5] in this era. Desai elaborates in Corporate tax avoidance and high-powered incentives [6] on how incentive design shapes tax-avoidance decisions, underscoring the governance-driven explanation of corporate tax behavior in this era.

BEPS and Global Coordination era

Andreas Peichl [1] is affiliated with KU Leuven [3] and the University of Antwerp [4] during this era. His 2018 paper, "Do Higher Corporate Taxes Reduce Wages? Micro Evidence from Germany" [7], analyzes whether higher corporate taxes reduce wages in Germany and clarifies why tax incidence and labor-market effects matter under BEPS and global coordination. Clemens Fuest [2] is affiliated with Heinrich Heine University Düsseldorf [5] and Ludwig-Maximilians-Universität München [6]. His contribution via the same paper Do Higher Corporate Taxes Reduce Wages? Micro Evidence from Germany [7] provides micro evidence on how corporate taxation affects wages and employment, highlighting the relevance of BEPS-era coordination for understanding firm behavior and worker outcomes.