Tax competition and fiscal democracy
How does international tax competition affect fiscal democracy? To what extent does it constrain the autonomy of democratic governments in choosing the level and structure of national taxation? While tax competition has not reduced the level of total taxation in OECD-22 countries, it has revenue effects at the level of selected taxes, especially taxes falling on mobile tax bases such as the corporate tax or taxes on private capital income. The nominal tax burden has shifted from capital to labor and consumption (domestic redistribution). While this result suggests that tax competition has a negative effect on national tax autonomy, because all competing countries see their ability to tax mobile capital constrained, small countries see their capacity to raise revenue from mobile capital increased at the expense of large countries (international redistribution). Because of these countervailing effects, the overall effect on small countries is ambiguous. By contrast, the tax autonomy of large countries has unambiguously declined because international and domestic pressures work in the same direction. Given that governments have to meet mandatory spending requirements on the expenditure side this may have contributed to higher fiscal deficits in large countries.
|Date of creation:||2012|
|Contact details of provider:|| Postal: Parkallee 39, 28209 Bremen|
Web page: http://www.sfb597.uni-bremen.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Devereux, Michael P. & Lockwood, Ben & Redoano, Michela, 2008.
"Do countries compete over corporate tax rates?,"
Journal of Public Economics,
Elsevier, vol. 92(5-6), pages 1210-1235, June.
- Devereux, Michael P & Lockwood, Ben & Redoano, Michela, 2002. "Do Countries Compete Over Corporate Tax Rates?," The Warwick Economics Research Paper Series (TWERPS) 642, University of Warwick, Department of Economics.
- Devereux, Michael P. & Lockwood, Ben & Redoano, Michela, 2002. "Do Countries Compete over Corporate Tax Rates?," CEPR Discussion Papers 3400, C.E.P.R. Discussion Papers.
- Jeremy Edwards & Michael Keen, 1994.
"Tax competition and Leviathon,"
IFS Working Papers
W94/07, Institute for Fiscal Studies.
- Andreas Haufler & Alexander Klemm & Guttorm Schjelderup, 2008.
"Economic integration and the relationship between profit and wage taxes,"
0810, Oxford University Centre for Business Taxation.
- Andreas Haufler & Alexander Klemm & Guttorm Schjelderup, 2009. "Economic integration and the relationship between profit and wage taxes," Public Choice, Springer, vol. 138(3), pages 423-446, March.
- Haufler, Andreas & Klemm, Alexander & Schjelderup, Guttorm, 2009. "Economic integration and the relationship between profit and wage taxes," Munich Reprints in Economics 20403, University of Munich, Department of Economics.
- Bucovetsky, S., 1991. "Asymmetric tax competition," Journal of Urban Economics, Elsevier, vol. 30(2), pages 167-181, September.
- Garrett, Geoffrey, 1998. "Global Markets and National Politics: Collision Course or Virtuous Circle?," International Organization, Cambridge University Press, vol. 52(04), pages 787-824, September.
- Bretschger, Lucas & Hettich, Frank, 2000.
"Globalisation, capital mobility and tax competition: Theory and evidence for OECD countries,"
07/2000, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.
- Bretschger, Lucas & Hettich, Frank, 2002. "Globalisation, capital mobility and tax competition: theory and evidence for OECD countries," European Journal of Political Economy, Elsevier, vol. 18(4), pages 695-716, November.
- Ruud A. de Mooij & Sjef Ederveen, 2008.
"Corporate Tax Elasticities A Reader’s Guide to Empirical Findings,"
0822, Oxford University Centre for Business Taxation.
- Ruud A. de Mooij & Sjef Ederveen, 2008. "Corporate tax elasticities: a reader's guide to empirical findings," Oxford Review of Economic Policy, Oxford University Press, vol. 24(4), pages 680-697, winter.
- Julia Darby & Jacques Melitz, 2008. "Social spending and automatic stabilizers in the OECD," Economic Policy, CEPR;CES;MSH, vol. 23, pages 715-756, October.
- repec:ntj:journl:v:54:y:2001:i:n._4:p:757-62 is not listed on IDEAS
- 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.
When requesting a correction, please mention this item's handle: RePEc:zbw:sfb597:161. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.