Tax Competition, Imperfect Capital Mobility and the gain from non-preferential agreements
AbstractThe gain to competing governments from entering into binding non-preferential tax agree- ments (that prevents discriminatory taxation in favor of mobile capital) depends on the extent of capital mobility between jurisdictions. In particular the gain is increasing in the cost of re- location of capital and the fraction of the domestic tax base which is relatively immobile. We show this in a symmetric model of capital tax competition between two governments where all capital is imperfectly mobile and di¤er only in their cost of relocation.
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Bibliographic InfoPaper provided by Southern Methodist University, Department of Economics in its series Departmental Working Papers with number 0804.
Date of creation: Jul 2008
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Postal: Department of Economics, P.O. Box 750496, Southern Methodist University, Dallas, TX 75275-0496
Web page: http://www.smu.edu/economics
Tax Competition; Capital Mobility; Non-Preferential Regime.;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ACC-2008-08-14 (Accounting & Auditing)
- NEP-ALL-2008-08-14 (All new papers)
- NEP-PBE-2008-08-14 (Public Economics)
- NEP-URE-2008-08-14 (Urban & Real Estate Economics)
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