The consequences of labour mobility for redistribution: tax vs. transfer competition

• 成果类型: Article
• 署名作者: Hindriks, J
• 署名单位: University of Exeter
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(99)00026-2
• 发表日期: 1999
• 页码: 215-234
• 关键词: Tax competition; redistribution; mobility

摘要

In a context where both the poor and the rich are (imperfectly) mobile, this paper compares the Nash equilibrium levels of income redistribution from the rich to the poor when jurisdictions compete either in taxes, in transfers or both in taxes and transfers. Although taxes and transfers are linked through the budget-balanced requirement, the analysis reveals intriguing differences. Indeed, it turns out that transfer competition results in much less redistribution than tax competition, while tax-transfer competition involves an intermediate level of redistribution. In each approach, the mobility of the rich is detrimental to redistribution and an increase in the dependency ratio reduces taxes. Concerning the effect of the mobility of the poor, these approaches reach opposite conclusions. That is, the mobility of the poor is beneficial to redistribution under tax competition but reduces redistribution under transfer competition. (C) 1999 Elsevier Science S.A. All rights reserved.