Koenig, Tobias; Wagener, Andreas - In: Journal of Economic Behavior & Organization 90 (2013) C, pp. 137-153
We augment a standard tax model by concerns about tax equity: people get upset when labour is taxed more heavily than capital. Even the slightest concern for tax equity invalidates the common tenet that capital remains tax-exempt in small open economies. This holds for exogenous as well as for...