Taxable Corporate Profits*. (December 2014)

• Record Type: Journal Article
• Authors: Griffith, Rachel; Miller, Helen
• Is Part Of: Fiscal studies. Volume 35:Number 4(2014)
• Page Start: 535
• Page End: 557
• Publication Date: 2014-12
• Subjects: Finance, Public -- Periodicals; Fiscal policy -- Periodicals; Economic policy -- Periodicals; Finance, Public -- Great Britain -- Periodicals; 336.3
• DOI: 10.1111/j.1475-5890.2014.12041.x
• Languages: English
• ISSNs: 0143-5671

Abstract

<abstract abstract-type="main"> <title>Abstract</title> <p>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 <italic>taxable</italic> 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.</p> </abstract>