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Lobbying and the international fight against tax havens

Author

Listed:
  • Hauck, Tobias

Abstract

Despite a variety of measures taken by high-tax countries, the international fight against tax havens so far remains rather ineffective. This paper introduces offshore lobbying as a possible explanation for this observation. The author analyzes the international fight against tax havens in a two-country model, in which the onshore country exerts pressure on domestic profit-shifting firms and the tax haven's government lobbies against this measure. In this framework, he finds that pressure and lobbying are strategic substitutes and that there is an extensive margin incentive for offshore lobbying. Furthermore, when starting at initially high costs for profit shifting, a reduction in these costs leads to fewer profit-shifting firms. Finally, when allowing for a second low-tax jurisdiction, the overall level of lobbying increases, but less than proportionally.

Suggested Citation

  • Hauck, Tobias, 2019. "Lobbying and the international fight against tax havens," Munich Reprints in Economics 78287, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:78287
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    Cited by:

    1. Hayato Kato & Hirofumi Okoshi, 2022. "Economic Integration And Agglomeration Of Multinational Production With Transfer Pricing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(3), pages 1325-1355, August.
    2. Ludger Schuknecht & Vincent Siegerink, 2021. "The Political Economy of the International Tax Transparency Agenda in the G20/OECD Context," CESifo Working Paper Series 8813, CESifo.

    More about this item

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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