Advanced Search
MyIDEAS: Login

Globalization and tax policy

Contents:

Author Info

  • Neumann, Rebecca
  • Holman, Jill
  • Alm, James

Abstract

Globalization is thought to reduce the ability of governments to collect taxes. If labor and capital can move between jurisdictions, then attempts to tax these factors will lead to a "vanishing taxpayer" as factors flee from high- to low-tax regions. More broadly, globalization suggests that there will be some convergence in tax rates across countries. This paper questions this view by examining the impact of globalization on taxation using a two-country, two-factor, two-good model. In particular, we ask how globalization, measured by increased international factor mobility, affects the ability of governments to tax factors. Our quantitative analysis indicates that, while increased mobility reduces revenues to some extent, governments still retain significant ability to collect taxes.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6W5T-4VNH46W-1/2/74bb0090744a5c3ffdd0b548a1bc9e7a
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal The North American Journal of Economics and Finance.

Volume (Year): 20 (2009)
Issue (Month): 2 (August)
Pages: 193-211

as in new window
Handle: RePEc:eee:ecofin:v:20:y:2009:i:2:p:193-211

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620163

Related research

Keywords: Globalization International factor mobility Tax competition;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Amrita Dhillon & Myrna Wooders & Ben Zissimos, 2007. "Tax Competition Reconsidered," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(3), pages 391-423, 06.
  2. Clemens Fuest & Bernd Huber & Jack Mintz, 2003. "Capital Mobility and Tax Competition: A Survey," CESifo Working Paper Series 956, CESifo Group Munich.
  3. Devereux, Michael P. & Lockwood, Ben & Redoano, Michela, 2008. "Do countries compete over corporate tax rates?," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1210-1235, June.
  4. Braid, Ralph M, 1996. "Symmetric Tax Competition with Multiple Jurisdictions in Each Metropolitan Area," American Economic Review, American Economic Association, vol. 86(5), pages 1279-90, December.
  5. Bucovetsky, Sam & Wilson, John Douglas, 1991. "Tax competition with two tax instruments," Regional Science and Urban Economics, Elsevier, vol. 21(3), pages 333-350, November.
  6. Lawrence H. Goulder & John B. Shoven & John Whalley, 1983. "Domestic Tax Policy and the Foreign Sector: The Importance of Alternative Foreign Sector Formulations to Results from a General Equilibrium Tax Analysis Model," NBER Chapters, in: Behavioral Simulation Methods in Tax Policy Analysis, pages 333-368 National Bureau of Economic Research, Inc.
  7. David Carey & Harry Tchilinguirian, 2000. "Average Effective Tax Rates on Capital, Labour and Consumption," OECD Economics Department Working Papers 258, OECD Publishing.
  8. Peralta, Susana & van Ypersele, Tanguy, 2003. "Coordination of Capital Taxation Among Asymmetric Countries," CEPR Discussion Papers 3695, C.E.P.R. Discussion Papers.
  9. Jeffrey A. Frankel, 2000. "Globalization of the Economy," NBER Working Papers 7858, National Bureau of Economic Research, Inc.
  10. David K. Backus & Patrick J. Kehoe & Finn E. Kydland, 1987. "International real business cycles," Working Papers 426, Federal Reserve Bank of Minneapolis.
  11. KEEN, Michael & MARCHAND, Maurice, 1996. "Fiscal Competition and the Pattern of Public Spending," CORE Discussion Papers 1996001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Eckhard Janeba & Guttorm Schjelderup, 2009. "The Welfare Effects of Tax Competition Reconsidered: Politicians and Political Institutions," Economic Journal, Royal Economic Society, vol. 119(539), pages 1143-1161, 07.
  13. Schlagenhauf, Don E. & Wrase, Jeffrey M., 1995. "Exchange rate dynamics and international effects of monetary shocks in monetary, equilibrium models," Journal of International Money and Finance, Elsevier, vol. 14(2), pages 155-177, April.
  14. Amrita Dhillon & Carlo Perroni & Kimberley A. Scharf, . "Implementing Tax Coordination," EPRU Working Paper Series 97-09, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  15. Mutti, John & Grubert, Harry, 1985. "The taxation of capital income in an open economy: the importance of resident-nonresident tax treatment," Journal of Public Economics, Elsevier, vol. 27(3), pages 291-309, August.
  16. Agnès Bénassy-Quéré & Nicolas Gobalraja & Alain Trannoy, 2005. "Tax Competition and Public Input," Economics Working Papers 040, European Network of Economic Policy Research Institutes.
  17. Slemrod, Joel, 2004. "Are corporate tax rates, or countries, converging?," Journal of Public Economics, Elsevier, vol. 88(6), pages 1169-1186, June.
  18. Gordon, R.H. & Bovenberg, A.L., 1994. "Why Is Capital So Immobile Internationally?: Possible Explanations and Implications for Capital Income Taxation," Working Papers 358, Research Seminar in International Economics, University of Michigan.
  19. Kenneth Stewart & Michael Webb, 2006. "International competition in corporate taxation: evidence from the OECD time series," Economic Policy, CEPR & CES & MSH, vol. 21(45), pages 153-201, 01.
  20. Pedro Gomes & Francois Pouget, 2008. "Corporate Tax Competition and the Decline of Public Investment," CESifo Working Paper Series 2384, CESifo Group Munich.
  21. Pedro Gomes & Francois Pouget, 2008. "Corporate tax competition and the decline of public investment," Working Paper Series 928, European Central Bank.
  22. Ruud de Mooij & S. Ederveen, 2001. "Taxation and foreign direct investment; a synthesis of empirical research," CPB Discussion Paper 3, CPB Netherlands Bureau for Economic Policy Analysis.
  23. Grunberg, Isabelle, 1998. "Double jeopardy: Globalization, liberalization and the fiscal squeeze," World Development, Elsevier, vol. 26(4), pages 591-605, April.
  24. James R. Hines, 2006. "Will Social Welfare Expenditures Survive Tax Competition?," Oxford Review of Economic Policy, Oxford University Press, vol. 22(3), pages 330-348, Autumn.
  25. Jane G. Gravelle & Kent A. Smetters, 2006. "Does the Open Economy Assumption Really Mean That Labor Bears the Burden of a Capital Income Tax?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 0(1), pages 3.
  26. Mendoza, Enrique G. & Milesi-Ferretti, Gian Maria & Asea, Patrick, 1997. "On the ineffectiveness of tax policy in altering long-run growth: Harberger's superneutrality conjecture," Journal of Public Economics, Elsevier, vol. 66(1), pages 99-126, October.
  27. Jacob Frenkel & Assaf Razin, 1996. "Fiscal Policies and Growth in the World Economy," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262561042.
  28. Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
  29. Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. James Alm & Mir Ahmad Khan, 2008. "Assessing Enterprise Taxation and the Investment Climate in Pakistan," International Center for Public Policy (formerly the International Studies Program) Working Paper Series, at AYSPS, GSU paper0810, International Center for Public Policy (formerly the International Studies Program), Andrew Young School of Policy Studies, Georgia State University.
  2. Mark Skidmore & Mehmet Serkan Tosun, 2005. "Cross-Border Shopping and the Sales Tax: A Reexamination of Food Purchases in West Virginia," Working Papers 05-07, UW-Whitewater, Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:ecofin:v:20:y:2009:i:2:p:193-211

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.