Cascading Effects of Corporate Taxation in the Firm Network: Bonus Depreciation and Dividend Tax Cut Cases

Hideto Koizumi, Business Economics and Public Policy, The Wharton School

Abstract: Under the Trump administration, corporate tax policies have been recently attracting more and more attention. While there are papers studying direct effects of corporate tax, there is no research on indirect effects of corporate tax through the firm network. Using census data sets, this paper is the first study to estimate spillover effects of corporate taxation through the firm network. We specially focus on two corporate tax policies: bonus depreciation and dividend tax cut. The results of this paper are expected to help firms and entrepreneurs’ decision-making process in operation and innovation activities.