Abstract

This paper applies the technique of correlation analysis to find out the impact of corporate tax on government revenue and employment in OECD countries. The findings of the study suggest that there is no relationship between corporate income tax, government revenue, and employment during 2000 and 2019.

Highlights

  • Corporate taxation is an important source of revenue for the government (Cobham & Jansky, 2018)

  • The paper focuses on the impact of corporate taxation government revenues and employment levels in countries that belong to the Organization of Economic Cooperation and Development (OECD) group

  • Our study aims to contribute to the literature review by using a Pearson correlation analysis to determine the impact of corporate taxation on employment and economic output in OECD countries

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Summary

Introduction

Corporate taxation is an important source of revenue for the government (Cobham & Jansky, 2018). The paper focuses on the impact of corporate taxation government revenues and employment levels in countries that belong to the Organization of Economic Cooperation and Development (OECD) group. In OECD countries, a non-linear relationship exists between economic growth and corporate tax burden (Bodgan & Maria, 2017). Increasing the tax burden was found to have a detrimental effect on economic growth in OECD countries in the long run (Bodgan & Maria, 2017). The study is first of a kind in that it empirically verifies and determines the magnitude of the relationship between corporate income tax, government revenues, and employment in OECD countries using correlation analysis

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