Capital Taxation May Survive in Open Economies
Why do capital taxes still exist in an integrated world economy? When capital is perfectly mobile across countries and labour is fixed, a source-based tax on capital both reduces and redistributes world income. In a simple general equilibrium model we show that under plausible circumstances there always exists a country that bene¡¥ts from introducing such a tax. Countries that are richer in terms of human rather than ¡¥nancial capital tend to benefit from capital taxation.
References listed on IDEAS
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- Slemrod, Joel, 2004. "Are corporate tax rates, or countries, converging?," Journal of Public Economics, Elsevier, vol. 88(6), pages 1169-1186, June.
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NBER Working Papers
8854, National Bureau of Economic Research, Inc.
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