Skip to main content


The Impact of Headquarter and Subsidiary Locations on Multinationals' Effective Tax Rates
Kevin S. Markle, Dartmouth College
Douglas Shackelford, University of North Carolina at Chapel Hill and NBER

Markle and Shackelford examine effective tax rates (ETRs) for 9,022 multinationals from 87 countries from 2006 to 2011. They find that, despite extensive investments in international tax avoidance, multinationals headquartered in Japan, the United States, and some high-tax European countries continue to face substantially higher worldwide taxes than their counterparts in havens and other less heavily taxed locations. Other findings include: 1, effective tax rates remained steady over the investigation period; 2, entering a tax haven country for the first time results in a slight reduction in the firm's ETR; and 3, ETR changes vary depending on whether the subsidiary is a financial conduit or an operating subsidiary. These results should inform ongoing international tax policy debates and expand scholars' understanding of the taxation of multinationals.

Are Closely-Held Firms Tax Shelters?
Annette Alstadsæter, Norwegian University of Life Sciences
Wojciech Kopczuk, Columbia University and NBER
Kjetil Telle, Statistics Norway

In 2004 Norwegian authorities introduced dividend taxation for personal (but not corporate) owners which would take effect in 2006. This change provided incentives to maximize dividends in 2004 and 2005, and to retain earnings in the following years. Using Norwegian registry data that covers the universe of non-publicly traded firms, Alstadsætter, Kopczuk, and Telle find that dividend payments responded very strongly to the anticipated reform, but also that much of the response was compensated by injecting shareholder equity. On the other hand, following the reform firms began to retain earnings. While all categories of assets grew, the increase in durable assets categories that include equipment, machinery and company cars is particularly striking. The authors find that personally-owned firms and those that pursued aggressive dividend maximization policies in anticipation of the reform exhibit lower profits and economic activity after the reform, but retain earnings and accumulated assets at a comparable or faster rate than others. The authors interpret these results as indicating both the existence of real tax responses and supporting the notion that in the presence of dividend taxation, closely held firms partially serve as tax shelters.


This paper was distributed as Working Paper 19609, where an updated version may be available.

The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo
Christopher R. Knittel, Massachusetts Institute of Technology and NBER

From 1864 to 1972, the real price of oil fell by, on average, over one percent per year. This trend changed dramatically when prices for crude oil increased by over 650 percent from 1972 to 1980. Policymakers adopted several policies designed to keep oil prices in check and reduce consumption. Absent from these policies were taxes on either oil or gasoline, prompting a long economics literature on the inefficiencies of these policies. In this paper, Knittel reviews the policy discussion related to the transportation sector that occurred at the time through the lens of the printed press. In doing so, he pays particular attention to whether gasoline taxes were "on the table," as well as how consumers viewed the policies that were ultimately adopted. The discussions at the time suggest that meaningful changes in gasoline taxes were on the table, and there seemed to be more public discussion than there is today. Some in Congress and many presidential advisers in the Nixon, Ford, and Carter administrations supported and proposed gasoline taxes. The main roadblocks for taxes were Congress and the American people. Polling evidence at the time suggests that consumers preferred price controls, rationing, and vehicle taxes over higher gasoline taxes or letting gasoline prices clear the market. Given the prominence of rationing and vehicle taxes, it seems difficult to argue that these alternative polices were adopted because they hide their true costs.



Andrew Austin, Congressional Research Service
Mary Barth, Office of Management and Budget
Peter Brady, Investment Company Institute
Ike Brannon, Capital Policy Analytics
David Brazell, Department of the Treasury
Nicholas Bull, Joint Committee on Taxation
Kimberley Burham, Investment Company Institute
Aaron Butz, Congressional Budget Office
James Cilke, Joint Committee on Taxation
Adam Cole, Department of the Treasury
Jane Dokko, Federal Reserve Bank of Chicago
Amy Elliott, Tax Analysts
Tracy Foertsch, U.S. Department of the Treasury
Robert Gillette, Department of the Treasury
George Guttman, Government Accountability Office
Bobby Hodges, Internal Revenue Service
Sarah Holden, Investment Company Institute
Laurence Jacobson, Office of Management and Budget
Scott Jaquette, Department of the Treasury
Craig Johnson, Department of the Treasury
Laura Konda, Department of the Treasury
Georgia Kosmopolou, University of Oklahoma
Gene Kuehneman, Retired
Sally Kwak, Joint Committee on Taxation
Paul Landefeld, Joint Committee on Taxation
Greg Leiserson
Allen Lerman, retired
Sean Lowry, Congressional Research Service
Nancy Lutz, National Science Foundation
Jay Mallin, Stanford University
Thornton Matheson, Consultant
Anne Moore, Department of the Treasury
Damien Moore, Congressional Budget Office
Rachel Moore, Joint Committee on Taxation
Edward Nannenhorn, Government Accountability Office
John Navratil, Joint Committee on Taxation
Daniel Newlon, American Economic Association
Amy Palguta, Stanford University
Christie Parell, Stanford University
Ronald Promboin, retired
Karl Russo, Joint Committee on Taxation
Molly Sherlock, Congressional Research Service
Thomas Short, Government Accountability Office
Anne Stevens, Government Accountability Office
Michael Stevens, Department of the Treasury
Lori Stuntz, Ernst & Young, LLP
Kathleen Toma, Joint Committee on Taxation
Jack Wang, Government Accountability Office
Elwood White, Government Accountability Office
Jim White, Government Accountability Office
James Wozny, Government Accountability Office

More from NBER

In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Retirement and Disability, and the Bulletin on Health — as well as online conference reports, video lectures, and interviews.

Economics of Digitization Figure 1
  • Article
The NBER Economics of Digitization Project, established in 2010 with support from the Alfred P. Sloan Foundation, provides a forum for disseminating research...
  • Lecture
Claudia Goldin, the Henry Lee Professor of Economics at Harvard University and a past president of the American...
2020 Methods Lecture Promo Image
  • Lecture
The extent to which individual responses to household surveys are protected from discovery by outside parties depends...