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The Political Economy of Corporate Tax Harmonization: Why Do European Politicians (Dis)like Minimum Tax Rates?

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  • Osterloh, Steffen
  • Heinemann, Friedrich

Abstract

Setting minimum tax rates is a well discussed way of mitigating pressure from tax competition. This paper investigates which motives shape the support for a minimum corporate tax among politicians. We make use of a unique data base: a survey among members of the European parliament. Our results confirm that the politicians' ideology as well as individual characteristics such as educational background exert a major in uence. Moreover, several predictions regarding national interests are derived from various standard tax competition models. These hypotheses are partly supported by the data; in particular, different national preferences for social equality shape the support. A comparison with survey results from the German Bundestag reveals that German politicians on the national level do not show different preferences towards tax rate harmonization. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-108.

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7498

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Keywords: company taxation; tax harmonization; political economy; European Parliament;

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Cited by:
  1. Osterloh, Steffen & Debus, Marc, 2012. "Partisan politics in corporate taxation," European Journal of Political Economy, Elsevier, vol. 28(2), pages 192-207.
  2. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..

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