Did The Single Market Cause Competition in Excise Taxes? Evidence From EU Countries
AbstractTax competition theory predicts that the introduction of the EU Single Market in 1993 should have caused excise tax competition and thus increased strategic interaction in the setting of excise taxes among EU countries. We test this prediction using a panel data set of 12 EU countries over the period 1987-2004. We find that for excise duties on still and sparkling wine, beer and ethyl alcohol, strategic interaction significantly increased after 1993. There is weaker evidence of increased interaction in cigarette taxes, possibly because cigarettes are widely smuggled, giving rise to tax competition even before the Single Market. Copyright � The Author(s). Journal compilation � Royal Economic Society 2009.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 119 (2009)
Issue (Month): 536 (03)
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- Lockwood, Ben & Migali, Giuseppe, 2008. "Did the Single Market Cause Competition in Excise Taxes? Evidence from EU Countries," The Warwick Economics Research Paper Series (TWERPS) 847, University of Warwick, Department of Economics.
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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