Optimal income taxation with tax competition

We introduce tax competition for mobile labor into an optimal- taxation model with two skill levels and analyze a symmetric subgame- perfect Nash equilibrium of the game between two governments and two taxpayer populations. Tax competition reduces the distortion from the informational asymmetry and increases employment of the less productive individuals. When countries are heterogeneous, this e¤ect is more pronounced in the smaller country.

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Year of publication:	2012
Authors:	Lipatov, Vilen ; Weichenrieder, Alfons
Institutions:	Saïd Business School, Oxford University
Subject:	optimal income tax \| migration \| unemployment \| tax competition \| Leviathan government

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1207
Classification:	H21 - Efficiency; Optimal Taxation ; F22 - International Migration
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010883291