Using administrative plant-level data I study how the taxation of the capital stock affects firms and workers. Before a reform in 1998, the German local business tax was levied on two bases: profits and the capital stock. I exploit this unique setting to identify the effects of capital stock taxation. Businesses that experienced a larger tax cut increased investment and wages. However, aggregate employment was not affected in the long run. More exposed firms also earned higher profits. Comparing the estimates to the literature on corporate income taxation, I find slightly larger investment effects and similar effects on wages. In line with theoretical predictions, the tax cut also triggered increased firm entry, in particular by lower productivity firms. This resulted in lower average productivity. In contrast, I find that lower profit taxes are associated with higher productivity. This highlights the differences between taxing profits and capital.

We exploit the unique German setting of tying preferential tax treatment of

gratuitous business transfers to employment requirements to analyze the effects

of employment protection measures on affected firms. To this end, we combine

three data sources. First, we employ a large company database to identify ownership transfers in German firms between 2007 and 2022. Second, we link these

firms to death events drawn from multiple publicly available data sources to

build a panel of firms experiencing inheritance-related ownership successions.

Third, we obtain detailed employee outcomes for these firms from administrative establishment data. Preliminary results suggest that tying tax benefits to

employment requirements affects employee outcomes both in the short run and

long run.

We quantify behavioral responses to estate taxation by leveraging a tax cut and raise in Taiwan. Using a difference-in-difference design combined with administrative data, we show that net estates respond quickly and persistently. We estimate elasticities of net estates w.r.t. net-of-tax-rate is 1.7 (se 0.2) from the tax cut and 2.8 (se 0.4) from the tax raise. We find a discrepancy between the behaviors of those whose taxes are repealed and those whose tax rates are decreased but not removed, with the former having a substantially higher elasticity. A breakdown of net estates reveals taxpayers adjust assets or deductions that have greater flexibility for adjustments. Finally, we develop a model to explain our findings and derive sufficient statistics to assess the welfare effect. It is shown that the tax rates are too low and exemption thresholds are too high in both the old and new regimes.

We analyze behavioral responses to wealth taxation, exploiting variation from a reform reducing the marginal tax rate in the northern Norwegian municipality of Bø from 0.85% to 0.35%, since 2021. Mimicking the behaviour of a tax haven, Bø represents the first municipality unilaterally reducing the tax rate since the establishment of wealth taxation in Norway in 1892. We document a 66.6% increase in taxable wealth in response to a 1 percentage point drop in the tax rate. Internal mobility appears as the major behavioral response, accounting for a large portion of the post-treatment total net wealth in the treated municipality.