Factor Ownership and Governmental Strategic Interaction
Abstract
A fiscal policy of a jurisdiction alters the allocation of mobile factors among jurisdictions, affecting other jurisdictions and creating an externality. Since each jurisdiction does not take into account the externality, the equilibrium fiscal policy on mobile factors is inefficient. However, individuals of a jurisdiction may own immobile factors located in other jurisdictions. The government for the jurisdiction then considers the effects of its policy on the returns to the immobile factor located in other jurisdictions. The cross-ownership of immobile factors thus affects the efficiency of fiscal policies. The present paper considers capital tax competition as an example to illustrate the effects of the ownership structure of immobile factors on the equilibrium fiscal policy, and extends the analysis to other types of fiscal competition. Copyright 2003 Blackwell Publishing Inc..Download Info
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Bibliographic Info
Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 5 (2003)
Issue (Month): 2 (04)
Pages: 345-361
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Braid, Ralph M., 2005. "Tax competition, tax exporting and higher-government choice of tax instruments for local governments," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1789-1821, September.
- John Burbidge & Katherine Cuff & John Leach, 2005.
"Tax Competition with Heterogeneous Firms,"
Working Papers
05001, University of Waterloo, Department of Economics, revised Jan 2005.
- Burbidge, John & Cuff, Katherine & Leach, John, 2006. "Tax competition with heterogeneous firms," Journal of Public Economics, Elsevier, vol. 90(3), pages 533-549, February.
- Wolf Wagner & Sylvester Eijffinger, 2008.
"Efficiency of capital taxation in an open economy: tax competition versus tax exportation,"
International Tax and Public Finance,
Springer, vol. 15(6), pages 637-646, December.
- Eijffinger, S.C.W. & Wagner, W.B., 2008. "Efficiency of capital taxation in an open economy: Tax competition versus tax exportation," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125166, Tilburg University.
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