Government collusion in janeba's model of multijurisdictional tax competition
AbstractEckhard Janeba (Dec 2000 “Tax Competition when Governments lack Commitment” American Economic Review 90, 1508-19) has recently suggested a novel approach to modeling the relationship between governments and multinational firms. As part of ongoing research into various aspects of multijurisdictional tax competition, this paper investigates the possibility of allowing for collusion between governments when setting tax rates in the model. The findings show that a self-enforcing agreement is possible, with the beneficial effect of cutting the firm’s excess profits, limiting investment in excess capacity, and raising government revenue.
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Bibliographic InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 600.
Length: 8 pages
Date of creation: 2001
Date of revision:
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