The standard tax theory result that investment should not be distorted is based on the assumption that profits are … locally bound. In this paper we analyze the optimal tax policy when firms are internationally mobile. We show that the optimal … understanding recent tax policy developments in many OECD countries …

degree of subsidization should decrease with the extent to which the signal is informative, and may even turn into a tax when … provided by Section 170 of the US Tax Code, with the optimal design suggested by our normative analysis and offer changes that …

from a tax haven, multinationals can shift income out of host countries through the interest rates they charge and the … amount of debt for which interest is tax deductible (safe harbor rules) are inferior to rules that limit the ratio of debt … interest to pre-tax earnings (earnings stripping rules), even if a safe harbor rule is used in conjunction with an earnings …

The purpose of this paper is to assess whether politicians manipulate the timing of tax rate changes in a strategic way … to maximize reelection prospects. To do so, we exploit the German local business tax as a testing ground which is set … impact of elections on local business tax choices. The findings support the notion of a political cycle in tax setting …

In many countries entrepreneurship is promoted through tax reductions for small businesses and by various government …

This paper studies the effect of Finnish tax reforms in the mid 1990s on the economic activity and tax avoidance … decisions of the owners of small businesses. The reforms reduced income tax rates and increased tax planning incentives for … results imply that entrepreneurs react to tax incentives along both real and avoidance margins, while the latter elasticity is …

an optimal risk level in the pre-tax case under full liability, loss-offset restrictions reduce, and limited liability …-offset limitations inducing the same optimal risk level as in the reference case. Thereby we get tax neutrality with respect to risk … taking. We show that tax neutrality with respect to risk taking is incompatible with tax neutrality with respect to the …

repeated interactions model of tax competition when there are three heterogenous countries with respect to their capital … endowments. We show that regardless of the structure of the coalition (i.e., any group of countries), whether partial tax … average capital endowment of the large and small countries, the less likely is the tax harmonization including the median …

This paper studies corporate tax competition if it is costly to learn some of the elements that determine the effective … tax burden. Search cost may, but need not, eliminate the tax competition pressure. The outcome depends on the boundaries … of tax rate and tax base choices. Search cost can explain the empirically observed tax cuts cum base broadening …

We study the optimal combination of corporate tax rate and tax base in a model of a small open economy with … granting a tax allowance in excess of the true costs of capital. Economic integration reduces the optimal capital subsidy and …