Journal article
Is partial tax harmonization desirable?
Journal of public economics, Vol.92(1-2), pp.254-267
02/01/2008
DOI: 10.1016/j.jpubeco.2007.03.010
Abstract
We consider a setting in which capital taxation is characterized by two distortions working in opposite directions. On one hand, governments engage in tax competition and are tempted to lower capital tax rates. On the other hand, they are unable to commit to future policies and, once capital has been installed, have incentives to increase taxes. In this setting, there exists a tax that optimally trades off the two distortions. We compare three possible tax harmonization scenarios: no tax harmonization (all countries set taxes unilaterally), global tax harmonization (all countries coordinate their capital taxes), and partial tax harmonization (only a subset of all countries coordinate capital taxes). We show that, if capital is sufficiently mobile, partial tax harmonization benefits all countries compared to both global and no harmonization. (C) 2007 Elsevier B.V. All rights reserved.
Details
- Title: Subtitle
- Is partial tax harmonization desirable?
- Creators
- Paola Conconi - Université Libre de BruxellesCarlo Perroni - University of WarwickRaymond Riezman - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of public economics, Vol.92(1-2), pp.254-267
- DOI
- 10.1016/j.jpubeco.2007.03.010
- ISSN
- 0047-2727
- eISSN
- 1879-2316
- Publisher
- Elsevier
- Number of pages
- 14
- Language
- English
- Date published
- 02/01/2008
- Academic Unit
- Economics
- Record Identifier
- 9984963199402771
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