Question

Discuss in detail under what circumstances the economic incidence of corporate ​tax is: (closed as well as in a global economy)

​​1. on the owners of capital: state equity and efficiency (growth) implications.

​​2. Shifted either forward or backward: state equity and efficiency implications.

Answer 1

CORPORATE TAX IS ALSO CALLED CORPORATION TAX OR COMPANY TAX. THIS IS A DIRECT TAX IMPOSED BY A JURISDICTION ON THE INCOME OR CAPITAL OF CORPORATIONS OR LEGAL ENTITIES.

1. THE INCIDENCE OF CORPORATE TAXATION IS THE MOST DEBATED  AND KEY ISSUE ISSUE IN TAX POLICY DEBATES RUN BY TAXATION SPECIALISTS AND ECONOMISTS. AS PER THE LATEST DATA MOST PEOPLE HAVE AN OPINION THAT THE CAPITAL OWNERS BEAR THE BURDEN OF CORPORATE TAXATION SINCE THEY HAVE HIGH INCOMES. AT THE VERY SAME TIME THEY HAVE A VIEW THAT THIS HUGE TAX REDUCES THE INVESTMENT WHICH WILL LEAD TO DECLINE IN LABOUR PRODUCTIVITY AND WAGE AND THIS CLEARLY MEANS THAT WORKERS BEAR THE TAX BURDEN.
2. THE DIRECTION AND EXTEND OF TAX SHIFTING IS DETERMINED BASICALLY BY ONE PRINCIPLE, THE USERS OF A TAX OBJECT CAN AVOID THE TAX BURDEN TO A GREATER EXTEND THE EASIER IS TO FIND NON-TAXED OR LESS TAXED ALTERNATIVE OR SUBSTITUTE FOR THE TAX OBJECT