Residence- and source-based capital taxation in open economies with infinitely-lived consumers

• 成果类型: Article
• 署名作者: Gross, Till; Klein, Paul; Makris, Miltiadis
• 署名单位: Carleton University; Stockholm University; University of Kent
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103369
• 发表日期: 2020
• 关键词: Residence principle; Capital tax competition; Dynamic optimal taxation; open economy; Ramsey taxation

摘要

In this paper we investigate tax competition in a neoclassical growth model where each country may use both residence- and source-based capital taxes. We show that both types of capital taxes are zero at any interior steady state, just as in a closed economy. For symmetric countries, and even for countries that differ only with respect to size and productivity, we prove analytically and verify numerically that the open-economy policies coincide exactly with the closed-economy policies in all time periods. For countries that are asymmetric in other dimensions, we find that source-based taxes are used to manipulate the intertemporal terms of trade in the short run. Either way, the fiscal externalities of source-based taxes vanish once residence-based taxes are allowed. (C) 2020 Elsevier B.V. All rights reserved.