Policy and media concern has shifted from efforts to reduce international double taxation on corporate profits to more recent concern over double non-taxation. Headlines in the US and European media have claimed that some firms are not paying their ‘fair share’ of taxes, and there are now proposals to reform agreements on international taxation, most notably the OECD Addressing Base Erosion and Profit Shifting (BEPS) report.

The literature has long predicted a ‘race to the bottom’ in corporate income taxes, and recent reforms seem to support this prediction with substantial reductions in headline tax rates, the introduction of preferential tax rates on income from intangible assets and reduction in taxes on domestic multinational firms offshore income. Yet despite the long running concerns and the claims that companies do not pay enough tax, revenues from corporate income taxes have been surprisingly buoyant. This is mainly because corporate profits have increased as a share of GDP, both the share of activity that is in corporations has increased and profitability of corporations has increased.

In the first of the Tax and Transfer seminar series Professor Rachel Griffith will discuss what these trends suggest about what taxable profits represent, and what effects corporate taxes and proposed reforms might have on economic activity.

Rachel Griffith is Professor of Economics at the University of Manchester, Deputy Research Director of the Institute for Fiscal Studies, and a Fellow of the British Academy. She won the Birgit Grodal award in 2014, and she is Managing Editor of the Economic Journal. Her research considers the relationship between government policy and economic performance. Her specific interests relate to empirical industrial organisation, the retail food sector, nutrition, innovation, productivity and corporate tax.

This seminar is presented by Tax and Transfer Policy Institute at Crawford School of Public Policy at The Australian National University, in partnership with Revenue Group, The Treasury.

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