Help Privacy Policy Disclaimer
  Advanced SearchBrowse




Journal Article

Higher Profit Taxes Reduce Firms' R&D Activities


Poege,  Felix
MPI for Innovation and Competition, Max Planck Society;

External Resource
No external resources are shared
Fulltext (restricted access)
There are currently no full texts shared for your IP range.
Fulltext (public)
There are no public fulltexts stored in PuRe
Supplementary Material (public)
There is no public supplementary material available

Siegloch, S., Poege, F., Nguyen, T.-V., Löffler, M., Lichter, A., & Isphording, I. E. (2021). Higher Profit Taxes Reduce Firms' R&D Activities. Vox EU Column.

Cite as: https://hdl.handle.net/21.11116/0000-000E-3FE4-B
Studies have shown that targeted R&D tax incentives – such as tax credits for R&D spending – induce firms to conduct more R&D. However, little is known about the effects of general profit taxes on firm-level R&D spending and innovation output. This column presents evidence from Germany that points to sizeable negative effects of increasing profit taxes on firms’ R&D spending and patents. However, slashing business tax rates may not be the most efficient policy instrument to spur innovation altogether.