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Capital Mobility and Source-Based Taxation of Capital Income in Small Open Economies

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  • George Zodrow

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Abstract

This paper examines the taxation of capital income in a small open economy that faces a highly elastic supply of internationally mobile capital and increasing tax competition. The analysis considers a wide variety of additional factors that affect the determination of capital income taxation policy, including the desire to tax economic rents earned by foreign and domestic firms, the desire to take advantage of any treasury transfer effects, the role played by transfer pricing and other financial accounting manipulations by foreign multinationals, the need for a backstop to the personal income tax and various political concerns. The paper evaluates several potential income and consumption-based tax reforms in this context. Copyright Springer Science + Business Media, Inc. 2006

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File URL: http://hdl.handle.net/10.1007/s10797-006-4862-9
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Bibliographic Info

Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 13 (2006)
Issue (Month): 2 (May)
Pages: 269-294

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Handle: RePEc:kap:itaxpf:v:13:y:2006:i:2:p:269-294

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Web page: http://www.springerlink.com/link.asp?id=102915

Related research

Keywords: international taxation; capital income taxation; tax competition; dual income tax; income tax; consumption tax;

References

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Citations

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Cited by:
  1. John W. Diamond & George R. Zodrow, 2006. "Economic Effects of a Personal Capital Income Tax Add-On to a Consumption Tax," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0629, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  2. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," EPRU Working Paper Series 06-06, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  3. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," CESifo Working Paper Series 1793, CESifo Group Munich.
  4. Květa Kubátová & Lucie Říhová, 2009. "Regression analysis of factors influencing corporate tax revenues in OECD countries," Politická ekonomie, University of Economics, Prague, vol. 2009(4), pages 451-470.
  5. repec:cge:warwcg:83 is not listed on IDEAS
  6. Athiphat Muthitacharoen & George R. Zodrow, 2008. "The Efficiency Costs of Local Property Tax," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0815, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  7. Magnus Henrekson & Tino Sanandaji, 2011. "Entrepreneurship and the theory of taxation," Small Business Economics, Springer, vol. 37(2), pages 167-185, September.

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