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Mobile tax base as a global common

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  • Kai Konrad

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Abstract

If countries anticipate Bertrand competition in tax rates, they may expend effort that makes some of their tax payers less mobile or increases the mobility of tax payers elsewhere. I provide piecemeal evidence on what activities countries use. I analyse how such activities interact with Bertrand tax competition if the size of the group of loyal and non-loyal citizens or investors is endogenous. Further I consider the implications of tax harmonization and minimum taxes for these types of non-price competition. Home attachment reduces the intensity of tax competition, but generates a strategic disadvantage for the country that invests much in such home attachment. Harmonization of taxes and high minimum taxes can intensify countries’ investment in home attachment.

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Bibliographic Info

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

Volume (Year): 15 (2008)
Issue (Month): 4 (August)
Pages: 395-414

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Handle: RePEc:kap:itaxpf:v:15:y:2008:i:4:p:395-414

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

Related research

Keywords: Tax competition; Common pool; Advertising; Nation brands; Instilling preferences; Home bias; Patriotism; Mixed strategies; H77; F21; F22;

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Citations

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Cited by:
  1. Patrice Pieretti & Jacques-François Thisse & Skerdilajda Zanaj, 2013. "Offshore financial centers: Safe or tax havens," CREA Discussion Paper Series 13-20, Center for Research in Economic Analysis, University of Luxembourg.
  2. Qari, Salmai & Konrad, Kai A. & Geys, Benny, 2009. "Patriotism, Taxation and International Mobility," IZA Discussion Papers 4120, Institute for the Study of Labor (IZA).
  3. Nicolas Marceau & Steeve Mongrain & John D. Wilson, 2007. "Why Do Most Countries Set Higher Tax Rates on Capital?," Discussion Papers dp07-09, Department of Economics, Simon Fraser University.
  4. Christopher-Johannes Schild & Matthias Wrede, 2010. "Cultural Identity, Mobility, and Decentralization," MAGKS Papers on Economics 201016, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  5. Joel Slemrod, 2009. "Old George Orwell Got it Backward: Some Thoughts on Behavioral Tax Economics," CESifo Working Paper Series 2777, CESifo Group Munich.
  6. Pieretti, Patrice & Thisse, Jacques-François & Zanaj, Skerdilajda, 2011. "Tax havens or safe havens," CEPR Discussion Papers 8570, C.E.P.R. Discussion Papers.
  7. Konrad, Kai A. & Qari, Salmai, 2009. "The Last Refuge of a Scoundrel? Patriotism and Tax Compliance," IZA Discussion Papers 4121, Institute for the Study of Labor (IZA).
  8. Hendel, Ulrich, 2012. "The Influence of Altruistic Preferences on the Race to the Bottom of Welfare States," Discussion Papers in Economics 13999, University of Munich, Department of Economics.
  9. Patrice Pieretti & Jacques-François Thisse & Skerdilajda Zanaj, 2014. "Offshore financial centers and bank secrecy," CREA Discussion Paper Series 14-02, Center for Research in Economic Analysis, University of Luxembourg.
  10. Wolfgang Eggert & Jun-ichi Itaya, 2011. "Tax Rate Harmonization, Renegotiation and Asymmetric Tax Competition for Profits with Repeated Interaction," CESifo Working Paper Series 3437, CESifo Group Munich.

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