Coordination of capital taxation among asymmetric countries

Peralta, Susana;Van Ypersele, Tanguy
(2002)

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  • Peralta, Susana
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  • Van Ypersele, Tanguy
    Author
Abstract
This paper tackles the issue of international fiscal coordination in a world of integrated markets sovereign national governments. Taxation of mobile capital and immobile labor in order to finance a public good generates inefficient fiscal competition. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. We show that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound which is unanimously accepted.
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Peralta, S., & Van Ypersele, T. (2002). Coordination of capital taxation among asymmetric countries (CORE Discussion Papers 2002/32). https://hdl.handle.net/2078.5/128354