Ogawa et al. (2006) analyze capital tax competition in a fixed-wage approach and show that the original results of Zodrow and Mieszkowski (1986) are not preserved in the presence of unemployment. In the present paper we challenge this view and investigate capital tax competition for some...

Capital tax competition is known to result in inefficiently low tax rates and an undersupply of public goods. The provision of public goods and with it the welfare of all countries can be enhanced via tax coordination. Based on the standard Zodrow-Mieszkowski-Wilson tax-competition model this...

We extent a solvable version of the core-periphery agglomeration model to four countries located in two regions. The paper shows that there might still be a race to the bottom in capital income tax rates despite agglomeration rents earned by the mobile factor. We find that intra-regional tax...

We consider a model in which business public services must be financed with either a source-based tax on mobile capital, such as a property tax, or a tax on production, such as an origin-based VAT and assess which of the two tax instruments is more efficient. In general, both a capital tax and a...

This paper investigates the conditions under which partial harmonization for capital taxation is sustained in a repeated interactions model of tax competition when there are three countries with heterogenous capital endowments. We show that regardless of the structure of the coalition (i.e. full...

This paper challenges the view that tax base equalization by the so-called Representative Tax System (RTS) removes inefficient undertaxation in corporate tax competition. The innovation of the paper is that it focuses on a tax on corporate income, instead of the unit tax on capital considered in...

This paper analyses tax competition between a unionised and a non-unionised country for the location of an outside firm. We show that unionisation offers an extra incentive for the government to attract a foreign competitor to a concentrated domestic market, in order to affect the behaviour of...

This paper extends the Diamond (1980) model with labor unions to study optimal income taxation and to analyze whether unions can be desirable for income redistribution. Unions bargain with firms over wages in each sector and firms unilaterally determine employment. Unions raise the efficiency...

This paper shows that outsourcing of parts of the workforce in unionized firms leads to wage moderation and as long as the share of the outsourced workforce is not too large, this wage moderation effect on domestic employment outweighs the direct substitution effect so that domestic employment...

This paper analyzes unemployment insurance (UI) schemes in the presence of mobile workers and trade unions at industry or regional level that are capable of internalizing the effect of wage demands on UI contribution rates. We compare two types of existing UI systems. When UI is organized at...