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Company Tax Reform in Europe and its Effect on Collusive Behavior

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  • Dirk Schindler

    ()
    (Department of Economics, University of Konstanz)

  • Guttorm Schjelderup

    (Norwegian School of Economics and Business Administration an CESifo)

Abstract

We study how harmonization of corporate tax systems affects the stability of international cartels. We show that tax base harmonization reinforces collusive agreements, while harmonization of corporate tax rates may destabilize or stabilize cartels. We also find that bilateral and full harmonization to a common standard is worse from society’s point of view than unilateral harmonization to a minimum tax standard.

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Bibliographic Info

Paper provided by Center of Finance and Econometrics, University of Konstanz in its series CoFE Discussion Paper with number 06-01.

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Length: 20 pages
Date of creation: 30 Mar 2006
Date of revision:
Handle: RePEc:knz:cofedp:0601

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Keywords: Corporate tax systems; tacit collusion;

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  1. Michael Keen & Sajal Lahiri & Pascalis Raimondos-Møller, . "When is Policy Harmonisation Desirable?," EPRU Working Paper Series 98-02, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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  3. Haufler, Andreas & Schjelderup, Guttorm, 2004. "Tacit collusion and international commodity taxation," Munich Reprints in Economics 20417, University of Munich, Department of Economics.
  4. Scherer, Frederic Michael, 1996. "International trade and competition policy," ZEW Discussion Papers 96-18, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  17. Steen, Frode & Sorgard, Lars, 1999. "Semicollusion in the Norwegian cement market," European Economic Review, Elsevier, vol. 43(9), pages 1775-1796, October.
  18. Jürgen Meckl, 1996. "Market power of firms and exchange-rate fluctuations," Journal of Economics, Springer, vol. 63(1), pages 57-77, February.
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  20. Keen, Michael, 1987. "Welfare effects of commodity tax harmonisation," Journal of Public Economics, Elsevier, vol. 33(1), pages 107-114, June.
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  22. Marvel, Howard P, 1982. "Exclusive Dealing," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 1-25, April.
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