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The political economy of corporate tax harmonization — Why do European politicians (dis)like minimum tax rates?

  • Osterloh, Steffen
  • Heinemann, Friedrich

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 influence. 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 towards 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 attitudes towards tax rate harmonization.

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Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 29 (2013)
Issue (Month): C ()
Pages: 18-37

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Handle: RePEc:eee:poleco:v:29:y:2013:i:c:p:18-37
DOI: 10.1016/j.ejpoleco.2012.09.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505544

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