Capital Tax Exporting in a Model of Strategic Tax Competition

Mitch Kunce

The IUP Journal of Public Finance, 2006, vol. IV, issue 1, 32-38

Abstract: In order to probe the contentious implications of capital tax exporting, a strategic model of tax competition for two types of capital—absentee and domestically owned—is presented in this article. An efficient level of public goods provision, financed by the taxes levied on both types of capital, is a Nash equilibrium of the sub-federation game. The feasibility of the welfare-enhancing competition is conditional on a long-run complementary relationship between absentee-owned capital inputs and a region’s fixed factors.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjpf:v:04:y:2006:i:1:p:32-38

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