We analyze the restricted origin principle for taxing international trade in a three-country, three-commodity model where two of the countries form an economic union. Using simplifying assumptions with respect to the initial tax equilibrium and the structure of preferences, the effects of a...

A widely noticed result by de Crombrugghe and Tulkens (1990) states that asymmetric commodity tax competition always leads to tax rates being too low in both countries, even though there are counteracting tax base and terms of trade effects. This note argues that the result depends crucially on...

The paper analyzes the optimal mix of capital and wage taxation when policymakers maximize the political support of workers and capitalists, subject to a fixed revenue requirement. Capital market integration increases the efficiency costs of a tax on capital but simultaneously changes the...

The Commission of the European Communities has proposed to replace current border tax adjustments at the interaal borders of EC member countries by a set of three distinct measures that comprise an international tax-on-tax deduction of the value-added tax, the harmonization of current...

A two-sector trade model with perfect international capital mobility and endogenous supply of specific factors is used to analyze the relation between selective taxes on production (origin-based commodity taxes) and source-based taxes on capital income. A small open economy will set both of...

Using simple benchmark models, this paper gives an introductory analysis of three separate policy issues that relate to the taxation of multinational firms: (i) the spread of tax measures that provide discriminatory tax relief to multinational firms; (ii) the switch from the current separate...