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Strategic Capital Taxation in Large Open Economies with Mobile Capital

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  • Jiming Ha
  • Anne Sibert

Abstract

The purpose of this paper is to provide a methodologyfor computing time-consistent, strategic capital taxes in a largeopen economy and to analyze the nature of these taxes. Our resultssuggest that even if a full set of nondistortionary taxes isunavailable and even if the government has redistributive goals,the country which imports capital should tax corporate capitaland the capital exporter should subsidize it. We perform comparativestatics experiments to show how strategically chosen taxes varywith the parameters of the model. JEL classifications: H21,E62 Copyright Kluwer Academic Publishers 1997

Suggested Citation

  • Jiming Ha & Anne Sibert, 1997. "Strategic Capital Taxation in Large Open Economies with Mobile Capital," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(3), pages 243-262, July.
  • Handle: RePEc:kap:itaxpf:v:4:y:1997:i:3:p:243-262
    DOI: 10.1023/A:1008608219706
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    Cited by:

    1. Quadrini, Vincenzo, 2005. "Policy commitment and the welfare gains from capital market liberalization," European Economic Review, Elsevier, vol. 49(8), pages 1927-1951, November.
    2. Cees Withagen & Alex Halsema, 2013. "Tax competition leading to strict environmental policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 434-449, June.
    3. Mr. Geremia Palomba, 2004. "Capital Income Taxation and Economic Growth in Open Economies," IMF Working Papers 2004/091, International Monetary Fund.
    4. Till Gross, 2013. "Dynamic Optimal Taxation in Open Economies," Carleton Economic Papers 13-06, Carleton University, Department of Economics.
    5. Soojin Kim, 2014. "The Effects of Labor Migration on Optimal Taxation: An International Tax Competition Analysis," 2014 Meeting Papers 508, Society for Economic Dynamics.
    6. Lorz, Jens Oliver, 1993. "Der Wettbewerb um international mobiles Kapital: Auswirkungen auf die nationale Finanzpolitik und die intertemporale Kapitalallokation," Kiel Working Papers 608, Kiel Institute for the World Economy (IfW Kiel).
    7. Till Gross, 2013. "Capital Tax Competition and Dynamic Optimal Taxation," Carleton Economic Papers 13-08, Carleton University, Department of Economics.
    8. Gross, Till, 2014. "Equilibrium capital taxation in open economies under commitment," European Economic Review, Elsevier, vol. 70(C), pages 75-87.

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    More about this item

    Keywords

    capital taxation; capital mobility;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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