Endogenous Choice on Tax Instruments in a Tax Competition Model: Unit Tax versus Ad Valorem Tax

Nobuo Akai (), Hikaru Ogawa and Yoshitomo Ogawa

No 10-01, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper analyzes an endogenous choice problem with regard to tax instruments in a capital tax competition model. Considering a symmetric and two-region model of tax competition, where each region is allowed to choose either unit or ad valorem tax, we show that selecting unit tax as a policy instrument is the dominant strategy of governments. An interpretation of this result is clearly explained by the properties of the best response curves.

Keywords: Tax competition; Unit tax; Ad valorem tax (search for similar items in EconPapers)
JEL-codes: H20 H21 H77 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2010-01
New Economics Papers: this item is included in nep-acc, nep-pbe, nep-pub and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www2.econ.osaka-u.ac.jp/library/global/dp/1001.pdf (application/pdf)

Related works:
Journal Article: Endogenous choice on tax instruments in a tax competition model: unit tax versus ad valorem tax (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1001

Access Statistics for this paper

More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by The Economic Society of Osaka University ().