Tax harmonisation and political competition
AbstractIn this paper, we analyse tax harmonisation in the framework of two countries asymmetric in their capital-labour endowment. In the first part, countries play a non-cooperative game and we examine how na- tional fiscal policies are decided according to majority voting. At the Nash equilibrium, inefficiency arises because of the corresponding mis- allocation of resources. In the second part, we analyse fiscal policy co- ordination within the institutional framework of the European Union, where policy reforms are decided by unanimity rule. In most cases, we show that the imposition of a minimum capital tax rate is refused.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1997054.
Date of creation: 01 Aug 1997
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Fiscal competition; Mobility of factors of production; In- ternational policy coordination; Political economy;
Find related papers by JEL classification:
- F20 - International Economics - - International Factor Movements and International Business - - - General
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
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- Peralta, Susana & van Ypersele, Tanguy, 2006.
"Coordination of capital taxation among asymmetric countries,"
Regional Science and Urban Economics,
Elsevier, vol. 36(6), pages 708-726, November.
- PERALTA, Susana & VAN YPERSELE, Tanguy, . "Coordination of capital taxation among asymmetric countries," CORE Discussion Papers RP -1971, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Peralta, Susana & van Ypersele, Tanguy, 2003. "Coordination of Capital Taxation Among Asymmetric Countries," CEPR Discussion Papers 3695, C.E.P.R. Discussion Papers.
- PERALTA, Susana & van YPERSELE, Tanguy, 2002. "Coordination of capital taxation among Asymmetric countries," CORE Discussion Papers 2002032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Fuest, Clemens & Huber, Bernd, 2001.
" Tax Competition and Tax Coordination in a Median Voter Model,"
Springer, vol. 107(1-2), pages 97-113, April.
- Clemens Fuest & Bernd Huber, 2001. "Tax Competition and Tax Coordination in a Median Voter Model," Public Choice, Springer, vol. 107(1), pages 97-113, April.
- Ypersele, T.P.M.C. van, 1998. "Coordination of Capital Taxation Among a Large Number of Asymmetric Countries," Discussion Paper 1998-137, Tilburg University, Center for Economic Research.
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