Intra-regional Tax Competition and Economic Geography
We extent a solvable version of the core-periphery agglomeration model to four countries located in two regions. The paper shows that there might still be a race to the bottom in capital income tax rates despite agglomeration rents earned by the mobile factor. We find that intra-regional tax competition is detrimental from a welfare perspective and that tax harmonisation unambiguously makes both countries in the core region better off.
|Date of creation:||2007|
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- Baldwin, Richard & Krugman, Paul, 2000.
"Agglomeration, Integration and Tax Harmonization,"
CEPR Discussion Papers
2630, C.E.P.R. Discussion Papers.
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"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Ludema, Rodney D. & Wooton, Ian, 2000.
"Economic geography and the fiscal effects of regional integration,"
Journal of International Economics,
Elsevier, vol. 52(2), pages 331-357, December.
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- Rodney D. Ludema & Ian Wooton, 1998. "Economic Geography and the Fiscal Effects of Regional Integration," International Trade 9801001, EconWPA.
- Rodney D. Ludema & Ian Wooton, 1998. "Economic Geography and the Fiscal Effects of Regional Integration," Working Papers 9809, Business School - Economics, University of Glasgow.
- Forslid, Rikard, 1999. "Agglomeration with Human and Physical Capital: an Analytically Solvable Case," CEPR Discussion Papers 2102, C.E.P.R. Discussion Papers.
- Kind, H.J. & Knarvik, K.H.M. & Schjelderup, G., 1999.
"Competing for Capital in a "Lumpy" World,"
7/99, Norwegian School of Economics and Business Administration-.
- Hans Jarle Kind & Helene Midelfart & Guttorm Schjelderup, 2000. "Competing for Capital in a "Lumpy" World," CESifo Working Paper Series 252, CESifo Group Munich.
- Kind, Hans Jarle & Schjelderup, Guttorm & Ulltveit-Moe, Karen-Helene, 1999. "Competing for Capital in a 'Lumpy' World," CEPR Discussion Papers 2188, C.E.P.R. Discussion Papers.
- Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 449-495, October.
- Peter Birch Sørensen, 2007. "Can Capital Income Taxes Survive? And Should They?," CESifo Economic Studies, CESifo, vol. 53(2), pages 172-228, June.
- Michael P. Devereux & Peter Birch SÃ¸rensen, 2006. "The Corporate Income Tax: international trends and options for fundamental reform," European Economy - Economic Papers 2008 - 2015 264, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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