Tax Competition and Partial Coordination
AbstractTo determine the welfare effects of tax coordination, it is often assumed that one tax is jointly increased and all other policy instruments are held constant. This paper, in contrast, analyzes partial coordination in the sense that each country can still adjust another tax, which is not subject to coordination. In a model with capital and labor taxation, we show that under plausible assumptions the welfare effect of coordinating the capital tax only is then still nonnegative. For a partial coordination of the labor tax, however, the results become ambiguous and depend on the labor-supply elasticity.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 62 (2006)
Issue (Month): 3 (September)
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Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
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- Sven Wehke, 2007.
"Fighting Tax Competition in the Presence of Unemployment: Complete versus Partial Tax Coordination,"
FEMM Working Papers
07010, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Sven Wehke, 2008. "Fighting Tax Competition in the Presence of Unemployment: Complete versus Partial Tax Coordination," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(1), pages 33-62, March.
- Aronsson, Thomas & Wehke, Sven, 2008.
"Public goods, unemployment and policy coordination,"
Regional Science and Urban Economics,
Elsevier, vol. 38(3), pages 285-298, May.
- Aronsson, Thomas & Wehke, Sven, 2006. "Public Goods, Unemployment and Policy Coordination," UmeÃ¥ Economic Studies 700, Umeå University, Department of Economics.
- Kai A. Konrad, 2007.
"Mobile Tax Base as a Global Common,"
CESifo Working Paper Series
2144, CESifo Group Munich.
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