Pareto-improving minimum corporate taxation

Shafik Hebous and Michael Keen

Journal of Public Economics, 2023, vol. 225, issue C

Abstract: The international agreement on a minimum effective corporate tax rate, implementation of which is imminent, 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 the tax competition game – are critical for assessing the design and welfare impact of 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, 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: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Working Paper: Pareto-Improving Minimum Corporate Taxation (2022)
Working Paper: Pareto-Improving Minimum Corporate Taxation (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:225:y:2023:i:c:s0047272723001342

DOI: 10.1016/j.jpubeco.2023.104952

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