, 4 tweets, 2 min read
Interesting thread.What he is essentially arguing is national accounts should use legal incidence when reporting corporate tax rates and not economic incidence.However,his argument is inconsistent.He smuggles in economic incidence by subtracting it from shareholder's income
Legally, the corporation isn't owned by anyone. So if we're going to use legal incidence, corporate income taxes should just reduce retained earnings. This ultimately depends on what question we're asking. I think his strategy (modified to be legally coherent) makes sense.
An economic analysis is still necessary to get at tax changes however. As @rohangrey and I said in our corporate taxation paper "a corporation could pay corporate income taxes with lower retained earnings, lower investment, lower dividend payments, lower wages, or higher prices"
" Thus, while not obvious at first, understanding the incidence of corporate income taxation requires a theory of corporate price setting, investment decisions, finance decisions, and macroeconomic determination of profits"

ssrn.com/abstract=32002…
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