Fiscal Studies, Vol. 35, No. 4, December 2014
Revenues from corporate income taxes have remained relatively stable as a share of national income over the last three decades despite reductions in corporate tax rates and increased opportunities for multinational tax avoidance. This is largely explained by an increase in the share of corporate profits in national income. In this paper, we discuss the sources of corporate profits, and specifically corporate taxable profits; these include a normal return to capital investment, returns to labour or entrepreneurial effort that are realised as dividends or capital gains, and returns to market power. We relate these components of profits to the ways that corporate taxes can change incentives to invest or exert effort, and we discuss some implications for policy.
Authors
CPP Co-Director, IFS Research Director
Rachel is Research Director and Professor at the University of Manchester. She was made a Dame for services to economic policy and education in 2021.
Journal article details
- DOI
- 10.1111/j.1475-5890.2014.12041.x
- Publisher
- Wiley
- Issue
- December 2014
Suggested citation
Griffith, R and Miller, H. (2014). 'Taxable Corporate Profits' Fiscal Studies, Vol. 35, No. 4, December 2014, (2014)
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