Intra-regional Tax Competition and Economic Geography
AbstractWe extent a solvable version of the core-periphery agglomeration model to four countries located in two regions. The paper shows that there might still be a race to the bottom in capital income tax rates despite agglomeration rents earned by the mobile factor. We find that intra-regional tax competition is detrimental from a welfare perspective and that tax harmonisation unambiguously makes both countries in the core region better off.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2113.
Date of creation: 2007
Date of revision:
tax competition; economic geography; race to the bottom;
Other versions of this item:
- Ossip Hühnerbein & Tobias Seidel, 2010. "Intra-regional Tax Competition and Economic Geography," The World Economy, Wiley Blackwell, vol. 33(8), pages 1042-1051, 08.
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