Corporate tax revenues in OECD countries


This paper studies variation among OECD countries in the size of corporate income tax revenues relative to GDP over the time period 1979–2002. A decomposition explains such variation as a function of the statutory tax rate, the breadth of the tax base, corporate profitability, and the share of the corporate sector in GDP. Empirical results indicate a parabolic relationship between tax rates and revenues, implying a revenue-maximizing corporate income tax rate of 33% for the whole sample. This revenue-maximizing rate is found to decrease as economies are smaller and more integrated with the world economy.

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Correspondence to Kimberly A. Clausing.

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JEL Classification H25, H87

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Clausing, K.A. Corporate tax revenues in OECD countries. Int Tax Public Finan 14, 115–133 (2007).

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  • Corporate income taxation
  • Corporate income tax revenues
  • World tax competition
  • Multinational corporations