THE CORPORATE INCOME TAX RATE MAXIMIZING TAX REVENUES AND MARKET OUTPUT: EMPIRICAL EVIDENCE FROM THE UNITED KINGDOM, THE UNITED STATES, AND TÜRKİYE

Authors : Ali Balkı

Pages : 1000-1016

Doi:10.17130/ijmeb.1654750

View : 36 | Download : 40

Publication Date : 2025-09-30

Article Type : Research Paper

Abstract :This study estimates the corporate income tax rate that maximizes tax revenues and market output for the United Kingdom, the United States, and Türkiye using annual data from 1986-2021. The analysis conducted through the Augmented ARDL method shows a parabolic relationship between tax revenues and the corporate income tax rate in all three countries. There is a parabolic relationship between market output and the corporate income tax rate only in the United Kingdom. The optimal corporate income tax rate that maximizes market output in the United Kingdom is 22%, while the optimal corporate income tax rate for tax revenues is 32%. The optimal corporate income tax rate that maximizes tax revenues in the United States is 43%, while the optimal corporate income tax rate for tax revenues in Türkiye is 25%. Since the current corporate income tax rate in the United Kingdom is 25%, the government can increase this rate to increase tax revenues. The current corporate income tax rate in the United States (21%) is well below the optimal rate. The government has a wide maneuverable area to increase tax revenues. Türkiye\\\'s current corporate income tax rate (25%) equals the optimal rate. This situation shows that Türkiye attaches more importance to tax revenues than the other two countries.
Keywords : Optimal Vergi Oranı, Kurumlar Vergisi, Haldun-Laffer Eğrisi, Vergi Gelirleri, Piyasa Üretimi

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