Tax Competition and Migration: The Race-to-the-Bottom Hypothesis Revisited
AbstractOates reminds us that tax competition among localities in the presence of capital mobility, may lead to inefficiently low tax rates (and benefits). In contrast, the Tiebout paradigm suggests that tax competition yields an efficient outcome, so that there are no gains from tax coordination. This paper demonstrates that when a group of host countries faces an upward supply of migrants, labor and capital income tax rate under competition are higher than under tax coordination, due to a fiscal externality.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16670.
Date of creation: Jan 2011
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Find related papers by JEL classification:
- F2 - International Economics - - International Factor Movements and International Business
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-01-16 (Accounting & Auditing)
- NEP-ALL-2011-01-16 (All new papers)
- NEP-MIC-2011-01-16 (Microeconomics)
- NEP-MIG-2011-01-16 (Economics of Human Migration)
- NEP-PBE-2011-01-16 (Public Economics)
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.:
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"Fiscal and Migration Competition,"
NBER Working Papers
16224, National Bureau of Economic Research, Inc.
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"International tax competition and gains from tax harmonization,"
Elsevier, vol. 37(1), pages 69-76, September.
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- Mendoza, Enrique G. & Tesar, Linda L., 2005. "Why hasn't tax competition triggered a race to the bottom? Some quantitative lessons from the EU," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 163-204, January.
- Bob Chirinko & Daniel J. Wilson, 2007.
"Tax competition among U.S. states: racing to the bottom or riding on a seesaw?,"
Working Paper Series
2008-03, Federal Reserve Bank of San Francisco.
- Robert S. Chirinko & Daniel J. Wilson, 2011. "Tax Competition Among U.S. States: Racing to the Bottom or Riding on a Seesaw?," CESifo Working Paper Series 3535, CESifo Group Munich.
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