Is partial tax harmonization desirable?

• 成果类型: Article; Proceedings Paper
• 署名作者: Conconi, Paola; Perroni, Carlo; Riezman, Raymond
• 署名单位: Universite Libre de Bruxelles; University of Warwick; Leibniz Association; Ifo Institut; University of Iowa
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2007.03.010
• 发表日期: 2008
• 页码: 254-267
• 关键词: Tax competition; COMMITMENT; partial coordination

摘要

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.