Understanding Statutory Corporate Tax Rates and Corporate Tax Revenue: Evidence from OECD Countries, 2015–2023

Authors

• Carter Johnson, College of Saint Benedict and Saint John's University

Document Type

Paper

Publication Date

4-30-2026

Disciplines

Economics

Advisor

Dr. Sucharita Muhkerjee

Abstract

This paper analyzes the relationship between statutory corporate tax rates and corporate tax revenues among the OECD countries from 2015-2023. Since the 1980’s, statutory corporate tax rates have been gradually declining, however, the relationship between rate and revenue remains unclear. The Laffer Curve helps motivate the relationship between rate and revenue within the theoretical model. Foreign Direct Investment (FDI) and Real GDP are included as control variables, along with incorporating inflation and per capita measurements. The fixed effects panel regression findings conclude there is no direct relationship between corporate tax rate and revenue. However, FDI and Real GDP were found to be statistically significant, which suggests that every additional unit in revenue leads to larger increases in FDI and Real GDP. Policymakers should be mindful about setting rates for future policy if they seek to directly generate more revenue from rate alone, and must understand factors like FDI and Real GDP having a significantly larger presence in generating revenue.

Recommended Citation

Johnson, Carter, "Understanding Statutory Corporate Tax Rates and Corporate Tax Revenue: Evidence from OECD Countries, 2015–2023" (2026). Celebrating Scholarship and Creativity Day (2018-). 380.
https://digitalcommons.csbsju.edu/ur_cscday/380