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The Impact of Corporate Income Tax on Wages and Employment

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  • Etleva Bajrami

Abstract

This paper is focused on impact of corporate tax on wages and the number of employees. Since the main goal of businesses is profit and because wages are part of the costs it’s important to understand if businesses try to cut costs by reducing wages or through reducing the number of employees. In this paper, through the analysis is intend to understand whether there is a relation between changes in corporate tax rates, the growth rate of state revenues from corporate tax with the growth rate of wages. To achieve the purpose of this paper it will also be analyzed the relation between growth rates of corporate tax with the growth rate of employment. To reach the conclusion is analyzed the progress of wages, the progress rates of corporate tax and is presented a brief overview of the economy in general because the rate of its growth will affect businesses operating there and will affect all public because a part of them is employed in the private sector. By data analysis in this paper does not seem to pass the burden of corporate tax on employees through salary or number of employees.

Suggested Citation

  • Etleva Bajrami, 2017. "The Impact of Corporate Income Tax on Wages and Employment," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(2), pages 104-109, June.
    • Handle: RePEc:khe:scajes:v:3:y:2017:i:2:p:104-109
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    References listed on IDEAS

    as
    1. Kevin A. Hassett & Aparna Mathur, 2006. "Taxes and Wages," AEI Economics Working Papers 49800, American Enterprise Institute.
    2. Bernhard Heitger, 2002. "The Impact of Taxation on Unemployment in OECD Countries," Cato Journal, Cato Journal, Cato Institute, vol. 22(2), pages 333-354, Fall.
    3. Bania, Neil & Gray, Jo Anna & Stone, Joe A., 2007. "Growth, Taxes, and Government Expenditures: Growth Hills for U.S. States," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(2), pages 193-204, June.
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    More about this item

    Keywords

    Business taxes; state revenue; wage level; labor force and employment;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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