The gains from preferential tax regimes reconsidered
Gaigné, Carl and Wooton, Ian (2011) The gains from preferential tax regimes reconsidered. Regional Science and Urban Economics, 41 (1). pp. 59-66. (https://doi.org/10.1016/j.regsciurbeco.2010.08.002)
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Abstract
The EU policy against harmful tax competition aims at eliminating tax policies targeted at attracting the internationally mobile tax base. We construct an imperfectly competitive model of costly trade between two countries. In setting their corporate taxes, governments non-cooperatively decide whether to discriminate between internationally mobile and immobile firms. We find the Nash equilibrium tax regimes. When trade costs are high countries impose a uniform tax on all firms while nations will discriminate between mobile and immobile firms when costs are low. At some trade costs, fiscal competition results in tax discrimination despite uniform taxation being socially preferable.
ORCID iDs
Gaigné, Carl and Wooton, Ian ORCID: https://orcid.org/0000-0001-5084-6379;-
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Item type: Article ID code: 28036 Dates: DateEventJanuary 2011PublishedSubjects: Social Sciences > Economic Theory Department: Strathclyde Business School > Economics Depositing user: Miss Jenna Wright Date deposited: 13 Oct 2010 09:09 Last modified: 11 Nov 2024 09:28 URI: https://strathprints.strath.ac.uk/id/eprint/28036