Publications des chercheurs de PSE

The 2017 Tax Cut and Jobs Act reduced the US corporate tax rate and introduced provisions to curb profit shifting. We combine survey data, tax data, and firm financial statements to study the evolution of the geographical allocation of US firms’ profits after the reform. The share of profits booked abroad by US multinationals fell 3–5 percentage points, driven by repatriations of intellectual property to the US. The share of foreign profits booked in tax havens remained stable around 50% between 2015 and 2020. Changes in the global allocation of profits are small overall, but some firms responded strongly.

International tax rules are commonly viewed as obsolete as multinational corporations exploit loopholes to move their profits to tax havens. This paper uncovers how international tax reforms can curb profit shifting and impact real income and welfare across nations. We introduce profit shifting and corporate taxation in a quantitative model of multinational production. The model delivers “triangle identities” through which we recover bilateral profit-shifting flows. Our estimates of both tax-base and profitshifting elasticities, together with profit-shifting frictions, govern how taxes shape the geography of production and profits. Our model accommodates a rich set of corporate taxation scenarios. A global minimum tax would be beneficial for welfare since it would increase the public good provision and encourage countries to raise their statutory corporate tax rates. Instead, a border-adjustment tax that eliminates profit shifting could result in welfare losses.

Country-by-Country Reports (CbCRs) have emerged as a unique public source of information to track the country-by-country activities of multinational corporations. However, concerns about double counting and comparability have raised questions about the reliability of these reports for economic analyses. In this paper, we conduct a benchmark analysis focusing on publicly available CbCRs to assess the reliability of CbCR information compared to respective consolidated financial information. Our findings suggest only limited double counting issues. Most CbCR information matches well with the consolidated information, with only a few exceptions. Nonetheless, we document differences in the definition of variables and in the scope of the reports that may complicate comparisons across multinational corporations. We subsequently discuss the implications of our findings for the use of CbCRs as a source of information in economic analyses. In addition, we provide recommendations for improving the reliability and comparability of CbCR information.

International taxation rules are widely regarded as outdated, enabling multinational corporations to exploit loopholes and shift profits to tax havens. This paper explores how international tax reforms can address profit shifting and shape real income and welfare across countries. We propose a model of corporate tax avoidance that separates profits generated by real economic activities from paper profits shifted to tax havens. The model introduces ’triangle identities’ to estimate bilateral profit-shifting flows. Using macro- and firm-level data, we estimate that the elasticity of paper profits is three times greater than that of the tax base. Applying the model to global minimum tax reforms, we find that these policies improve welfare in two ways: by increasing tax revenues to support public goods and by reducing incentives for tax competition. We identify the optimal minimum tax rate under different scenarios of taxing rights allocation. Finally, our analysis shows that unilateral destination-based cash-flow tax reforms can have either positive or negative welfare effects, with outcomes depending significantly on trade imbalances.

The public-health community views mandatory Front-of-Pack (FOP) nutrition labels and nutritional taxes as promising tools to control the growth of food-related chronic diseases. This paper uses household scanner data to propose an ex-ante evaluation and comparison of these two policy options for the fromage blanc and dessert yogurt market. In most markets, labelling is voluntary and firms display fat labels only on the FOP of low-fat products to target consumers who do not want to eat fat. We here separately identify consumer preferences for fat and for FOP fat labels by exploiting an exogenous difference in legal labelling requirements between these two product categories. Estimates of demand curves are combined with a supply model of oligopolistic price competition to simulate policies. We find that a feasible ad valorem fat tax dominates a mandatory FOP-label policy from an economic perspective, but both are equally effective in reducing average fat purchases.

This paper analyzes the strategy of a monopolistic digital platform serving users from two jurisdictions with different corporate tax rates. We consider two profit-splitting rules, Separate Accounting and Formula Apportionment based on the number of users in the two jurisdictions. We show that, even in the absence of transfer pricing, the platform shifts profit from the high-tax to the low-tax jurisdiction exploiting network externalities under Separate Accounting and manipulating the apportionment key under Formula Apportionment. In order to shift profit, the platform distorts prices and quantities. Under Separate Accounting, the direction of the distortions depends on the sign of the externalities. We use a numerical simulation to show that the ranking of fiscal revenues under the two regimes differs in the two jurisdictions: The high-tax jurisdiction prefers Separate Accounting to Formula Apportionment, whereas the low-tax jurisdiction prefers Formula Apportionment to Separate Accounting.

This paper investigates the impacts of capital mobility and tax competition in a setting with imperfect matching between firms and workers. The small country attracts less firms than the large one but accommodates a share of the industry that exceeds its capital share–a reverse home market effect. This allows the small country to be more aggressive and to set a higher tax rate than the large one, thus implying that tax competition reduces international inequalities. However, the large country always attains a higher utility than does the small country. Our model thus encapsulates both the "importance of being small" and the "importance of being large". Last, tax harmonization benefits to the small country but is detrimental to the large one.

The point of this paper is to provide visual evidence of tax shifting and to measure empirically the distribution of the sales tax burden between consumers and producers. For that purpose, two French reforms are studied. These reforms entail steep decreases of the VAT rate. September 1st 1987, the VAT rate on car sales went down from the luxury-rate of 33.33% to the full-rate of 18.6%. September 1st 1999, the VAT rate on housing repair services went down from the full-rate of 20.6% to the reduced-rate of 5.5%. The consumer share of the sales tax burden is 57% in the new car sales market and 77% in the housing repair services market.

This paper uses administrative employer-employee data to uncover the effects of a large payroll tax reduction for minimum-wage workers in France in the 1990s. Exploiting the change in labor costs both at the job level and at the firm level, I find that the number of minimum-wage jobs increases but that these additionnal jobs stem exclusively from firms which had previously very few, or none, minimum wage workers. On the contrary, firms which already employed workers at minimum-wage levels, and thus benefit ex ante from a cash windfall, increase employment irrespective of wage levels. Overall, these results suggest that targeting cash-contrained firms, and not only groups of workers, is key for employment growth.

Cette étude analyse trois réformes fiscales françaises pour montrer les différences d'ajustement des prix à des augmentations ou des diminutions de TVA. Deux effets sont proposés. Le premier est dû à des asymétries dans les fonctions d'offre des producteurs, ce qui entraîne des hausses de prix plus importantes que les baisses de prix. Le second est dû à des asymétries dans les fonctions de demande des consommateurs, ce qui entraîne des hausses de prix moins importantes que les baisses de prix. Il est alors montré que le second effet, plus paradoxal que le premier, existe et peu compenser le premier effet en présence d'importants coûts fixes.

L'objectif de cette étude est de mesurer empiriquement le partage de la charge des taxes indirectes sur la consommation entre les consommateurs et les producteurs. Dans ce but, deux réformes françaises sont étudiées. Ces réformes consistent en d'importantes baisses des taux de TVA appliqués aux ventes de voitures neuves d'une part, et aux services de réparation dans les logements d'autre part. Le premier secteur est bien plus concentré que le second. La part du consommateur dans le paiement de la TVA est ainsi mesurée égale à 77% pour les services de réparation dans les logements et égale à 52% pour les ventes de voitures neuves. Cela confirme le résultat théorique prévoyant une part des consommateurs dans le paiement de la TVA croissante avec le degré de compétition. Ces résultats peuvent avoir des répercussions sur les recommandations en termes de taux de taxes indirectes différentiés.

Nous analysons l'effet des taux statutaires d'impôt sur les sociétés sur l'investissement direct japonais dans les pays émergents. Les écarts de taux entre le Japon et les pays hôtes créent des incitations à la manipulation des prix de transfert. Nous nous intéressons à la sensibilité à l'impôt de certains investissements plus susceptibles d'en bénéficier, telles que ceux dans les filiales détenues à 100%, ou pour lesquels la recherche et développement joue un rôle majeur. Nous estimons une équation d'investissement comprenant des caractéristiques du pays hôte, du secteur et de la firme mère à partir d'un échantillon de 3774 filiales de firmes japonaises localisées dans 49 pays. Nous obtenons une semi-élasticité de l'investissement au taux d'impôt statutaire plus élevée dans les cas de filiales détenues à 100% et de firmes mères intensives en recherche et développement. Nous interprétons ces résultats comme une preuve indirecte que la manipulation des prix de transfert appartient aux déterminants des flux d'investissement direct.