Public good differentiation and the intensity of tax competition

• 成果类型: Article
• 署名作者: Zissimos, Ben; Wooders, Myma
• 署名单位: Vanderbilt University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2007.09.009
• 发表日期: 2008
• 页码: 1105-1121
• 关键词: asymmetric equilibrium; core-periphery; Tax competition; Tax harmonization

摘要

We show that, in a setting where tax competition promotes efficiency, variation in the extent to which firms can use public goods to reduce costs brings about a reduction in the intensity of tax competition. This in turn brings about a loss of efficiency. In this environment, a 'minimum tax' counters the reduction in the intensity of tax competition, thereby enhancing efficiency. 'Split-the-difference' tax harmonization also potentially enhances efficiency but would not be agreed upon by governments because it lowers the payoff to at least one of them. This paper also presents an explanation for how traditionally high-tax countries have continued to set taxes at a relatively high rate even as markets have become more integrated. (C) 2007 Elsevier B.V. All rights reserved.