International Percussions of Direct Taxes
AbstractThis paper anlyzes the impact of tax competition between two countries of un- equal per-capita capital endownments on tax rates and efficiency when distorting wage, residence-based and source-based capital taxes (or any combination of two instruments) are available for governments. The national welfare costs and benefits of tax rate variations are shown to be ambiguous in the asymmetric Nash equilibrium due to the existence of tax base and terms of trade effects. Moreover, numerical simulation results indicate that non-cooperative equilibria in Nash strategies are inefficient from an international perspective, even if residence-based capital taxes are in the set of tax instruments available to fiscal authorities.
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Bibliographic InfoPaper provided by EconWPA in its series Finance with number 9904001.
Length: 25 pages
Date of creation: 14 Apr 1999
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Note: 25 pages
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Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H4 - Public Economics - - Publicly Provided Goods
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
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- Enrique G. Mendoza & Linda L. Tesar, 2003.
"A Quantitative Analysis of Tax Competition v. Tax Coordination under Perfect Capital Mobility,"
NBER Working Papers
9746, National Bureau of Economic Research, Inc.
- Enrique G. Mendoza & Linda L. Tesar, 2003. "A Quantitative Analysis of Tax Competition v. Tax Coordination under Perfect Capital Mobility," Working Papers 507, Research Seminar in International Economics, University of Michigan.
- Enrique G. Mendoza & Linda L. Tesar, 2004.
"Winners and Losers of Tax Competition in the European Union,"
508, Research Seminar in International Economics, University of Michigan.
- Enrique G. Mendoza & Linda L. Tesar, 2003. "Winners and Losers of Tax Competition in the European Union," NBER Working Papers 10051, National Bureau of Economic Research, Inc.
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