Equilibria and location choice in corporate tax regime Ben J. Niu
By: Niu, Ben J
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ArticlePublisher: 2019Subject(s): IMPUESTOS | SOCIEDADES | LOCALIZACION | COMPETENCIA FISCAL NOCIVAOnline resources: Click here to access online
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Public Finance Review v. 47, n. 2, March 2019, p. 433-458Summary: This article considers the impact of preferential, base-specific taxation on equilibrium revenues. While policy makers have argued that it generates a prisoner’s dilemma result, there is mixed support in the academic literature. Using a more plausible model with asymmetric base elasticities and heterogeneity of both firms and countries, I find that preferential taxation can generate greater revenues if countries exhibit sufficient productivity and/or population asymmetry. It is also less distortionary except in cases where moving costs are fully deductible. Allowing for noncorrelated, cross-country profits is the key factor as it generates base expansion effects.
| Item type | Current location | Home library | Call number | URL | Status | Date due | Barcode |
|---|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 581/2019/2-5 (Browse shelf) | https://journals.sagepub.com/doi/pdf/10.1177/1091142117729434 | Available | OP 581/2019/2-5 |
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This article considers the impact of preferential, base-specific taxation on equilibrium revenues. While policy makers have argued that it generates a prisoner’s dilemma result, there is mixed support in the academic literature. Using a more plausible model with asymmetric base elasticities and heterogeneity of both firms and countries, I find that preferential taxation can generate greater revenues if countries exhibit sufficient productivity and/or population asymmetry. It is also less distortionary except in cases where moving costs are fully deductible. Allowing for noncorrelated, cross-country profits is the key factor as it generates base expansion effects.
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