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International Tax Competition and Coordination

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Author Info

  • Michael Keen
  • Kai A. Konrad

Abstract

This paper aims to provide a comprehensive survey of the theory of international tax competition. Starting with the standard framework, it visits the non-cooperative equilibrium of tax competition, analyses aspects of partial and regional coordination, repeated interaction, stock-flow-effects, agglomeration effects and time consistency issues in dynamic models. We discuss profit shifting in the Keen-Kanbur model and then survey frameworks to analyze countries’ bidding for firms, tax rate differentiation and preferential tax regimes, the role of information exchange and recent work on tax havens. The paper also discusses approaches that replace the benevolent government assumption by selfish (Leviathan) governments or by political processes that determine countries' decisions on their tax policy in an international context.

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File URL: http://www.tax.mpg.de/RePEc/mpi/wpaper/Tax-MPG-RPS-2012-06.pdf
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Bibliographic Info

Paper provided by Max Planck Institute for Tax Law and Public Finance in its series Working Papers with number international_tax_competition_and_coordination.

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Length: 87 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:mpi:wpaper:international_tax_competition_and_coordination

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Keywords: International taxation; tax competition;

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References

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Citations

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Cited by:
  1. Yutao Han, 2013. "Who benefits from partial tax coordination?," CREA Discussion Paper Series 13-24, Center for Research in Economic Analysis, University of Luxembourg.
  2. Yutao Han & Patrice Pieretti & Benteng Zou, 2013. "The Dynamics of the Location of Firms – A Revisit of Home-Attachment under Tax Competition," CREA Discussion Paper Series 13-15, Center for Research in Economic Analysis, University of Luxembourg.
  3. Yutao Han & Patrice Pieretti & Benteng Zou, 2013. "On the desirability of tax coordination when countries compete in taxes and infrastructures," CREA Discussion Paper Series 13-02, Center for Research in Economic Analysis, University of Luxembourg.

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