Optimal Cooperative Taxation in the Global Economy

• 成果类型: Article; Early Access
• 署名作者: Chari, V. V.; Nicolini, Juan Pablo; Teles, Pedro
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; Universidad Torcuato Di Tella; Banco de Portugal; Universidade Catolica Portuguesa
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/720889
• 发表日期: 2023
• 关键词: technology; DYNAMICS; TRADE

摘要

How should countries cooperate in setting fiscal and trade policies when government expenditures must be financed with distorting taxes? We show that even if countries cannot make explicit transfers to each other, every point on the Pareto frontier is production efficient, so that international trade and capital flows should be effectively free. Trade agreements must be supplemented with fiscal policy agreements. Residence-based income tax systems have advantages over source-based systems. Taxing all household asset income at a country-specific uniform rate and setting the corporate income tax to zero yield efficient outcomes. Value-added taxes should be adjusted at the border.