My Research

Working Papers

Optimal Benefit-Based Corporate Income Tax
I argue that the corporate income tax is justified by the benefit view of taxation—that firms should pay tax according to the benefits they receive from using public inputs. Benefit-based taxation of firms is fair, both within and across countries. I derive a formula for the optimal benefit-based corporate tax rate. It is a function of two estimable elasticities: the public input elasticity of profits and the (net of) tax elasticity of profits. I empirically apply this formula to public firms in the United States, finding an optimal tax rate in the region of 35 to 59 percent.

How Big Are Strategic Spillovers from Corporate Tax Competition?
In this paper I estimate the size of strategic spillovers from corporate tax competition. Existing evidence suggests that the revenue loss due to strategic spillovers is substantial. A three-country, three-firm model of tax competition predicts that the relative size of a government’s optimal response to a neighbour’s tax cut depends on the size of the capital flows induced by the neighbour’s tax cut. I use this theoretical prediction to empirically identify the size of strategic spillovers. Using data on bilateral cross-country capital stocks to weight the average foreign tax rate, I find that governments respond to a 1 percentage point cut in the foreign tax rate with a 0.23 percentage point cut of their own. This estimate is a third of the size of previous estimates. This paper suggests that revenue loss from tax competition is modest compared to previous estimates.


Publications

“Distance matters: the impact of physical and relative distance on pleasure tourists’ length of stay in Barbados.” with Mahalia Jackman, Troy Lorde, and Tori Greenaway. Annals of Tourism Research 80.102794 (forthcoming).

“Does crime depend on the ‘state’ of economic misery?” with Troy Lorde, Mahalia Jackman, and Shane Lowe. International Journal of Social Economics 43.11 (2016): 1124-1134.

“Three states of fiscal multipliers in a small open economy.” with Justin Carter, and Shane Lowe. Economics Bulletin 35.1 (2015): A76.

“Nowcasting tourist arrivals in Barbados—just Google it!” with Mahalia Jackman. Tourism Economics 21.6 (2015): 1309-1313.

“Offshore Financial Centers in the Global Capital Network.” Global Economy Journal 14.3-4 (2014): 435-451.