A Simple Model of Corporate Tax Incidence.

This article explores the effects of corporate taxes on shareholders, workers, and investment. It presents different perspectives on the issue, with some arguing that corporate taxes redistribute income and others claiming they are self-defeating. The article introduces a simplified model that predicts how corporate taxes impact wages, employment, domestic pretax profits, and domestic capital. The model suggests that manufacturing firms may be more affected by corporate taxes than service firms, which aligns with recent empirical evidence. The article also provides empirical evidence and analytical examples to support its findings. It concludes by acknowledging the limitations of the model and suggesting areas for further research. [Extracted from the article]