Tax policy competition under destination‐based taxation

Thomas Beyer and Thomas Gresik

Review of International Economics, 2025, vol. 33, issue 1, 33-50

Abstract: We extend Bond and Gresik (On the incentive compatibility of universal adoption of destination‐based cash flow taxation, International Tax and Public Finance, October 2022) by analyzing the equilibrium capital expense deduction policies that arise when countries compete for multinational investment under destination‐based taxation. Bond and Gresik proved that destination‐base cash flow taxation cannot arise as a tax competition equilibrium. We show that policies that allow for no deduction (income taxation) and those that allow a partial deduction can arise in equilibrium. In the former case, public good provision will be efficient. In the latter case, weak over‐provision of the public good will arise.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/roie.12729

Related works:
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:bla:reviec:v:33:y:2025:i:1:p:33-50

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().