We study the optimal combination of corporate tax rate and tax base in a model of a small open economy with heterogeneous firms. We show that it is optimal for the small country's government to effectively subsidize capital inputs by granting a tax allowance in excess of the true costs of...

In this paper, I estimate the effect of increasing labor mobility on personal income tax schedules. I combine rich data on effective personal income tax levels in a panel of OECD countries for the period 1986-2005 with a new Index of Potential Labor Mobility. This index allows to tackle issues...