A Synthesis of Recent Developments in the Theory of Capital Tax Competition
AbstractThis paper proposes a unifying framework for theories of capital tax competition, and surveys and synthesizes the literature within this framework. The synthesis covers various standard tax competition models, models allowing for leviathan governments and democratic elections, in addition more recent contributions to the literature such as cross hauling of investment and models allowing for agglomeration forces to be associated with capital mobility. The paper illustrates under which assumptions the race to the bottom in tax rates results from increasing capital mobility, and when capital tax rates can be expected to increase as a result of higher capital mobility.
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Bibliographic InfoPaper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 04-02.
Length: 49 pages
Date of creation: Jul 2003
Date of revision:
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tax competition; capital taxation; capital mobility;
Find related papers by JEL classification:
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- F2 - International Economics - - International Factor Movements and International Business
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- Ozlem Onaran & Valerie Boesch & Markus Leibrecht, 2012. "How Does Globalization Affect The Implicit Tax Rates On Labor Income, Capital Income, And Consumption In The European Union?," Economic Inquiry, Western Economic Association International, vol. 50(4), pages 880-904, October.
- Jolanta Ga³uszka, 2013. "The Fiscal Union as a Remedy For the Economic and Financial Crisis in the European Union," Equilibrium, Wydawnictwo Naukowe Uniwersytetu Mikolaja Kopernika, vol. 8, pages 49-67.
- C. Dembour, 2008. "Competition for Business Location: A Survey," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 89-111, June.
- Mara (Nandra), Eugenia Ramona, 2007. "Tax Competition in the European Union – Evidence from Panel Data," MPRA Paper 21082, University Library of Munich, Germany, revised 2007.
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