Dynamic Capital Tax Competition under the Source Principle

• 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 Essex
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20190340
• 发表日期: 2022
• 页码: 365-410
• 关键词: Fiscal competition; optimal taxation; equilibrium; externalities; COOPERATION; EXISTENCE; common

摘要

We explore the short- and long-run implications of tax competition between jurisdictions, where governments can only tax capital at source. We do this in the context of a neoclassical growth model under commitment and capital mobility. We provide a new theoretical perspective on the dynamic capital tax externalities that emerge in this model. Numerically, we show that the net capital tax externality is positive in the short run but converges to zero in the long run. We also find that noncooperative source-based capital taxes are initially positive and slowly decline toward zero.