Pareto-Improving Minimum Corporate Taxation

Shafik Hebous and Michael Keen

No 9633, CESifo Working Paper Series from CESifo

Abstract: The recent international agreement on a minimum effective corporate tax rate marks a profound change in global tax arrangements. The appropriate level of that minimum, however, has been, and remains, extremely contentious. This paper explores the strategic responses to a minimum tax, which—–the policy objective being to change the rules of tax competition game–—are critical for assessing the design and welfare impact of, and prospects for, this fundamental policy innovation. Analysis and calibration plausibly suggest sizable scope for minima that are Pareto-improving, benefiting low tax countries as well as high tax, relative to the uncoordinated equilibrium.

Keywords: tax competition; minimum taxation; corporate tax reform; international taxation (search for similar items in EconPapers)
JEL-codes: F23 H21 H25 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-acc and nep-pbe
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Citations: View citations in EconPapers (3)

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Journal Article: Pareto-improving minimum corporate taxation (2023)
Working Paper: Pareto-Improving Minimum Corporate Taxation (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9633

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