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Capital mobility, tax competition, and lobbying for redistributive capital taxation

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  • Lorz, Oliver

Abstract

This paper analyzes the impact of international capital mobility on redistributive capital taxation and on lobbying activities by interest groups. It employs a model where different capital endowments lead to a conflict between households concerning their most preferred capital tax rate. Three main results are derived: First, redistributive source based capital taxes or subsidies decline as international tax competition intensifies. Second, lobbying activities of certain interest groups may explain international differences in the capital tax rate. Third, capital mobility may lead to declining lobbying activities of interest groups and thus may be welfare increasing for all households.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 14 (1998)
Issue (Month): 2 (May)
Pages: 265-279

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Handle: RePEc:eee:poleco:v:14:y:1998:i:2:p:265-279

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Web page: http://www.elsevier.com/locate/inca/505544

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Citations

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Cited by:
  1. Yu-Bong Lai, 2014. "Asymmetric tax competition in the presence of lobbying," International Tax and Public Finance, Springer, Springer, vol. 21(1), pages 66-86, February.
  2. Eckhard Janeba & Guttorm Schjelderup, 2009. "The Welfare Effects of Tax Competition Reconsidered: Politicians and Political Institutions," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 119(539), pages 1143-1161, 07.
  3. Eckhard Janeba & Guttorm Schjelderup, 2002. "Why Europe Should Love Tax Competition - and the U.S. Even More So," NBER Working Papers 9334, National Bureau of Economic Research, Inc.
  4. Lorz, Oliver, 2001. "On the effects of capital mobility on local infrastructure policy and rent-seeking," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 31(2-3), pages 319-337, April.
  5. Eggert, Wolfgang & Sørensen, Peter Birch, 2008. "The effects of tax competition when politicians create rents to buy political support," Journal of Public Economics, Elsevier, Elsevier, vol. 92(5-6), pages 1142-1163, June.
  6. Raghbendra Jha & Hari K. Nagarajan & Kolumum R. Nagarajan, 2013. "Fiscal Federalism and Competitive Bidding for Foreign Investment as a Multistage Game," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2013-04, The Australian National University, Arndt-Corden Department of Economics.
  7. Cheikbossian, Guillaume, 2005. "Heterogenous Groups and Rent-Seeking for Public Goods," Cahiers du LASER (LASER Working Papers), LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1 2005.16, LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1.
  8. Siebert, Horst, 2000. "The paradigm of locational competition," Kiel Discussion Papers 367, Kiel Institute for the World Economy (IfW).
  9. Feld, Lars P, 2000. " Tax Competition and Income Redistribution: An Empirical Analysis for Switzerland," Public Choice, Springer, Springer, vol. 105(1-2), pages 125-64, October.
  10. Marcel Gérard & Fernando M.M. Ruiz, 2009. "Corporate Taxation and the Impact of Governance, Political and Economic Factors," CESifo Working Paper Series 2904, CESifo Group Munich.
  11. Wolfgang Eggert & Peter Birch Sørensen, 2007. "The Effects of Tax Competition when Politicians Create Rents to Buy Political Support," EPRU Working Paper Series, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics 07-04, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  12. Cheikbossian, Guillaume, 2008. "Rent-seeking, spillovers and the benefits of decentralization," Journal of Urban Economics, Elsevier, vol. 63(1), pages 217-228, January.
  13. Lai, Yu-Bong, 2010. "The political economy of capital market integration and tax competition," European Journal of Political Economy, Elsevier, Elsevier, vol. 26(4), pages 475-487, December.
  14. Lorz, Jens Oliver, 1998. "On the effects of factor mobility on local infrastructure policy and rent-seeking," Kiel Working Papers 850, Kiel Institute for the World Economy.

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