Some implications of corporate taxation for rent-seeking activity

In this paper we show that corporate taxes are likely to have considerable implications for rent-seeking activity. We find that corporate taxation ten ds to significantly reduce rent-seeking, and that it favors rent-seeking by established firms and discriminates against new and zero profit firms. Ind eed, we show that corporate tax regulations may completely block rent-seeki ng by new corporations, and that rent-seeking competitions may be character ized by an equilibrium that features a small number of profitable and well established firms. Tax regulations may therefore impart an oligopolistic te ndency to rent-seeking markets. Moreover, our results may have significant implications for the effects of corporate taxes on patent races, tournament s, and other first-past-the-post competitions.