Is tax harmonization useful?
It is a widely acknowledged result of the literature on capital tax competition that underprovision of public goods can only be avoided if tax coordination between governments is intensive and residence-based capital taxation can be enforced. In this paper we use a model where commodity and factor taxes are available and we show that governments competing for tax bases will choose a globally efficient tax structure. In contrast to previous conclusions, we also show that the availability of a destination-based commodity tax or a labor tax is necessary to mitigate the problem of inefficient Nash equilibria and thus reduces the necessity of supranational tax harmonization or coordination.
Year of publication: |
2000-08
|
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Authors: | Eggert, Wolfgang ; Genser, Bernd |
Institutions: | Zentrum für Finanzen und Ökonometrie, Fachbereich Wirtschaftswissenschaften |
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freely available
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