Jeux Sans Frontieres: Tax Competition and Tax Coordination when Countries Differ in Size
AbstractCloser international integration is putting increasing pressure on existing national tax structures. this paper uses a simple two-country model to address a range of policy concerns that consequently arise, focusing particularly on the role of national size. Differences in size exacerbate the inefficiency due to non-cooperative behavior, harming both countries. The smaller country would lose form harmonization to any tax rate between those of the non-cooperative equilibrium, but both countries would gain from the imposition of a minimum tax anywhere in that range. The fully optimal response to freer cross-border trade, however, may be to do absolutely nothing.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 819.
Length: 40 pages
Date of creation: May 1991
Date of revision:
Other versions of this item:
- Kanbur, Ravi & Keen, Michael, 1993. "Jeux Sans Frontieres: Tax Competition and Tax Coordination When Countries Differ in Size," American Economic Review, American Economic Association, vol. 83(4), pages 877-92, September.
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