Taxing capital and labor when both factors are imperfectly mobile internationally

Hippolyte d’Albis () and Agnès Benassy-Quere
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Hippolyte d’Albis: Paris School of Economics, CNRS
Authors registered in the RePEc Author Service: Hippolyte d'Albis

International Tax and Public Finance, 2022, vol. 29, issue 1, No 6, 147-190

Abstract: Abstract We revisit the standard theoretical model of tax competition to consider imperfect mobility of both capital and labor. We show that the mobility of one factor affects the taxation of both factors and that the ”race-to-the-bottom” narrative (with burden shifting) applies essentially to capital-exporting countries. We validate our predictions using a panel of 29 OECD countries over the period of 1997–2017. The quantitative contribution of rising capital mobility to the decline of corporate income tax rates over our sample period is nonetheless less than that of population ageing.

Keywords: Tax competition; Globalization; Imperfect factor mobility (search for similar items in EconPapers)
JEL-codes: F21 F22 H25 (search for similar items in EconPapers)
Date: 2022
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Related works:
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2022)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2022)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2021)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2021)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2019)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2019)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2018)
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DOI: 10.1007/s10797-021-09663-4

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