A Quantitative Analysis of Tax Competition V. Tax Coordination Under Perfect Capital Mobility
- Topics:
- Taxes
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Overview: Theory predicts that strategically-determined tax rates induce negative externalities across countries in relative prices, the wealth distribution and tax revenue. This paper studies the interaction of these externalities in a dynamic, general equilibrium environment and its effects on quantitative outcomes of tax competition in one-shot games over capital income taxes between two governments that set time-invariant taxes and issue debt. Strategic payoffs correspond to welfare gains net of the cost of transitional dynamics in a standard neoclassical two-country model with exogenous balanced growth.
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Format: PDF | Size: 384KB | Date: May 2003 | Pages: 42




