A growing literature in public and corporate finance emphasizes the role of intertemporal tax arbitrage for investment and firm activity, and several papers have documented salient anticipatory payout responses to pre-announced tax changes that were implemented as planned. We study an unusual event in the history of Swedish tax policy. An increase in the dividend tax on shares of closely held corporations, scheduled for January 1, 2018, was canceled at short notice. We examine how shareholders and firms reacted to the discontinued reform. Dividends accelerated in 2016 and 2017, but the impact of these financial operations on firm investment is unclear.

This paper uses administrative data to analyze the incidence effects of an employer-administered EITC program in Italy. In a setting that allows to disentangle the wage from the employment effects of EITCs, I find no effect on gross wages at the market level. I explore the role of firm-level mechanisms as determinants of tax incidence. The reform creates more or less exposed firms as a share of their pre-reform eligible workers. Earnings of eligible workers in more exposed firms decrease compared to comparable less exposed firms. Highly exposed firms capture up to 30% of the transfer. The effect is monotonic in the share of eligible workers. Both higher rent-seeking incentives or higher salience can explain the results. The results show significant heterogeneity in the incidence of tax credits across firms and highlight that firm-level channels in the transmission of incidence of wage subsidies are likely to be significant.

We investigate how income should be redistributed in economies where taxpayers supply multiple production factors which may be imperfect substitutes. The production sector may exhibit market imperfections and be specifically impacted by some "production policies" including the taxation of intermediate goods (e.g. taxing robots), public production, trade openness and competition policies.Deviation from production efficiency depends on whether or not the tax system can be reformed in some specific directions, that we label "GE-replicating", which replicate the effects on taxpayers' supplies and utility of factor price adjustments. If reforms in the GE-replicating directions are admissible, production policies should be designed solely to enhance production possibilities. Moreover, tax formula incidence and optimal tax formula are only modified to correct for market imperfections. We illustrate these insights with practical examples, including intermediary goods taxation, Cournot duopoly scenarios, changes in trade regulations, and taxing robots.