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The Park Place Economist

Abstract

While there have been a variety of studies looking at the impact corporate taxation can have on some of these variables (most dealing with foreign direct investment and whether labor or capital bears the greater burden), the purpose of this research will be to directly study the impact that lowering the corporate income tax rate can have on unemployment levels in a country. I will be doing this through an empirical study of 15 European Union member countries, mainly due to the availability of data and the unique mobility of capital, by utilizing an ordinary least squares regression equation. Understanding the impact corporate taxation can have on unemployment is vital for a country in order to help facilitate responsible taxation policies considering it is hypothesized changes in corporate taxation can have a significant impact on unemployment levels.

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