Tax Competition and Foreign Capital

Ronald Davies () and Thomas A. Gresik ()
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Thomas A. Gresik: University of Notre Dame, Mendoza College of Business

University of Oregon Economics Department Working Papers from University of Oregon Economics Department

Abstract: This paper derives welfare equivalence of double taxation rules in a tax competition model with discriminatory home taxes and the ability to finance subsidiary operations with host country capital. For a more general model, we provide sufficient conditions on the number of host sectors and factors that support double-tax-rule equivalence. Examples violating these conditions help identify economic factors under which a home country's has strict preferences over double taxation rules. If the home tax rate can influence host factor prices, the home country weakly prefers deductions over credits as in the pure-home equity financing case.

Keywords: tax competition; double taxation; foreign capital (search for similar items in EconPapers)
JEL-codes: F21 F23 H25 (search for similar items in EconPapers)
Date: 2001-01-01
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Related works:
Journal Article: Tax Competition and Foreign Capital (2003)
Journal Article: Tax Competition and Foreign Capital (2003)
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