This paper studies the optimal taxation of capital income in a simple model of a small open economy where domestic residents can evade taxes on their foreign investment income. The national government can only tax domestic capital income and can impose capital controls, which however absorb real...

It is a striking feature of EU tax policy that countries find it difficult to agree on capital tax coordination. This is in conflict with the prevailing theoretical view, according to which tax coordination is beneficial. This paper develops a political economy argument which may help to explain...

This paper analyzes the welfare effects of capital tax coordination in a simple model of fiscal competition where fiscal policy is subject to majority voting and households differ with respect to their labor and capital income. It turns out that a coordinated capital tax increase may raise or...

It is well known that consumption-tax systems have several advantagesover existing income-tax systems, such as greater administrativesimplicity and intertemporal neutrality. Despite these advantages,proposals to introduce consumption taxes have only had very limitedsuccess. This paper discusses...

The paper uses the self-selection approach of to study tax competition and tax coordination in a many country-optimum income tax model. In the model, the government can impose a non-linear tax schedule on wage income and a (source-based) tax on mobile capital. In an uncoordinated equilibrium, it...

Many European countries exempt foreign profits from domestic corporate taxation. At the shareholder level, however, all corporate profits are taxed, and double taxation relief is granted only for domestic corporate taxes. This paper attempts to rationalize this tax policy. In the presence of...

Recent contributions to the theory of taxation argue that tax progression raises welfare and employment in the presence of labour market imperfections. This literature takes the endowment of workers with human capital as given. The present paper analyses the effects of tax progression in a model...

This paper considers the implications of asymmetric information in capital markets for entrepreneurial entry and tax policy. In many countries, governments subsidize the creation of new firms. One possible justification for these subsidies is that capital markets for the financing of new firms...

This paper analyzes the welfare effects of capital tax coordination in a simple model of fiscal competition where fiscal policy is subject to majority voting and households differ with respect to their labor and capital income. It turns out that a coordinated capital tax increase may raise or...