It is shown that the development of capital income tax rates in the European Union (EU) and in other industrialized countries as well as the development of corporate income tax revenues do not indicate that a race to the bottom has taken place. If tax competition should become as fierce as some observers seem to fear, the arguments in favor of tax competition instead of harmonization should be kept in mind. If tax rates are cut in a process of competition, government expenditures have to be reduced; this helps to avoid waste and inefficiencies in the public sector. In addition, tax competition might help to find better tax systems, and every country could learn from the experiences of other countries. In contrast, tax harmonization would probably lead to higher taxes in the EU.

Download Info

To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 916.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 30 pages
Date of creation: Mar 1999
Date of revision:
Handle: RePEc:kie:kieliw:916

Contact details of provider:
Phone: +49 431 8814-1
Fax: +49 431 85853
Email:
Web page: http://www.ifw-kiel.de

For technical questions regarding this item, or to correct its listing, contact: (Dieter Stribny).

Related research

Keywords: Tax competition; Tax Rate Harmonization; Value-added Taxation in the EU; Capital Income Taxation in the EU;

Find related papers by JEL classification:
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

1. Agnès Bénassy-Quéré & Lionel Fontagné & Amina Lahrèche-Révil, 2001. "Foreign Direct Investment and Company Taxation in Europe," Economics Working Papers 004, European Network of Economic Policy Research Institutes. [Downloadable!]
2. Alfred Boss, 2003. "Steuerharmonisierung oder Steuerwettbewerb?," Kiel Working Papers 1178, Kiel Institute for the World Economy. [Downloadable!]
3. André Fourçans & Thierry Warin, 2001. "Tax Harmonization versus Tax Competition in Europe: A Game Theoretical Approach," Cahiers de recherche CREFE / CREFE Working Papers 132, CREFE, Université du Québec à Montréal. [Downloadable!]
4. Agnes Benassy-Quere & Lionel Fontagne & Amina Lahreche-Revil, 2000. "Foreign Direct Investment and the Prospects for Tax Co-Ordination in Europe," Working Papers 2000-06, CEPII research center. [Downloadable!]

Did you know? IDEAS uses the data collected within the RePEc project, the largest online bibliographic database in Economics.

This page was last updated on 2009-12-14.