Tax competition: strategic tax rate lowering and expected impact of US 2017 reform on other countries
|Author:||Bc. Júlia Hamráková|
|Year:||2019 - summer|
|Leaders:|| doc. Petr Janský Ph.D.
|Work type:|| Bachelors
|Awards and prizes:|
|Abstract:||This thesis deals with an international corporate income tax competition with
focus on corporate income tax rate spillovers from the past tax cuts in the USA.
The main research question we seek the answer to is: "Do countries follow the
USA in the corporate income tax rate setting?" Empirical models were evaluated using GMM model for the panel data. Our results confirm the existence
of the tax rate spillovers, however, do not prove solid leadership of the USA in
the tax rate setting. We found that countries which are geographically closer to
the USA and OECD jurisdictions are more likely to follow the USA in the tax
rate policy changes. Our research is unique extension to the previous literature
dealing with this topic as it uses not only the weighted world corporate income
tax rate in the model, but also the corporate income tax rate of the USA and
therefore allows us to see the effect of the past tax cuts in the USA for other
countries. The results of our work can serve as a lead for examining the impact
of the US tax rate cut in 2017.