This paper analyzes how a fiscal transfer scheme affects tax cooperation in a repeated-interaction model of tax competition. In particular, the paper studies whether a fiscal transfer scheme promotes or blocks voluntary tax cooperation. It is shown that the larger the scale of fiscal transfer...

This paper explores how trade integration influences the decision by national governments to bailout manufacturing firms. We develop a 2-country model of generalized oligopoly with heterogenous firms and trade costs. High-cost firms are eligible for a bailout while low-cost firms are profitable....

An increase in the taxation of foreign affiliates reduces domestic investment, as has recently been empirically shown in Becker and Riedel (2012). This paper investigates the implication of this finding for tax competition. It is shown that an increase in the number of multinational firms (in...

A tax competition model is presented to investigate the effects of tax havens on the public good provision. We show that when countries facing a rise in tax havens change their tax enforcement strategies in response, the existence of tax havens may result in a higher level of equilibrium public...

We reevaluate Young and Varner’s (YV) study of the effect of New Jersey’s 2004 income tax increase on migration. The 2004 “millionaires’ tax†raised New Jersey’s marginal income tax rate from 6.37 percent to 8.97 percent on incomes over US$500,000. YV...

Standard models of horizontal strategic capital tax competition predict that, in a Nash equilibrium, tax rates are inefficiently low due to externalities - capital infl ow to one state corresponds to capital out ow for another state. Researchers often suggest that the federal government impose...

Starting from the objectives and the status of European tax harmonization and based on the research literature's studies, the paper formulates its own arguments pro tax competition and con total fiscal harmonization, with regard to direct taxation, by responding to some key questions: "Have...

The process of globalization, which is ongoing in a variety of dimensions, the ever-increasing mobility of capital and production factors as well as the fiscal problems in many European countries make the debate over tax competition still relevant today. The article discusses the problem of tax...

This paper models tax competition for mobile firms that are differentiated by the amount of labor needed to cover fixed costs. Because tax competition affects the distribution of firms, it affects both relative equilibrium wages across countries and equilibrium prices. These in turn influence...

Abstract Is corporate tax competition a threat to democracy in the EU? The answer dependscrucially on a positive analysis of the effects of tax competition on national policy autonomy.Most analyses focus on direct effects on corporate tax rates and revenues. Wecontend that this focus is too...