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Harmonization of Corporate Tax Systems and Its Effect on Collusive Behavior

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  • DIRK SCHINDLER
  • GUTTORM SCHJELDERUP

Abstract

We study how harmonization of corporate tax systems affects the stability of international cartels. We show that tax base harmonization reinforces collusive agreements, while harmonization of corporate tax rates may destabilize or stabilize cartels. We also find that bilateral and full harmonization to a common standard is worse from society's point of view than unilateral harmonization to a minimum tax standard. Copyright © 2009 Wiley Periodicals, Inc..

Suggested Citation

  • Dirk Schindler & Guttorm Schjelderup, 2009. "Harmonization of Corporate Tax Systems and Its Effect on Collusive Behavior," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(4), pages 599-621, August.
  • Handle: RePEc:bla:jpbect:v:11:y:2009:i:4:p:599-621
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    Cited by:

    1. Denvil Duncan & Ed Gerrish, 2014. "Personal income tax mimicry: evidence from international panel data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(1), pages 119-152, February.
    2. Tim Friehe, 2014. "Tacit collusion and liability rules," European Journal of Law and Economics, Springer, vol. 38(3), pages 453-469, December.

    More about this item

    JEL classification:

    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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