Can Tax Coordination Work?

Clemens Fuest and Bernd Huber

FinanzArchiv: Public Finance Analysis, 1999, vol. 56, issue 3/4, 443-

Abstract: A large part of the literature on tax competition argues that capital tends to be undertaxed if there is no international coordination of tax policies. This result constitutes an important theoretical basis for practical tax policy in particular in the EU, where minimum tax rates have been proposed for corporate taxation and withholding taxes on interest income. This paper shows that coordination arrangements of the type currently discussed in the EU face the problem that national governments have incentives to neutralise coordinated tax increases or minimum rates by adjusting tax instruments not covered by the agreement. Capital tax coordination will therefore only be effective if it takes into account the interaction between all available tax instruments that affect the cost of capital.

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (15)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:mhr:finarc:urn:sici:0015-2218(200007)56:3/4_443:ctcw_2.0.tx_2-u

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

Access Statistics for this article

FinanzArchiv: Public Finance Analysis is currently edited by Alfons Weichenrieder, Ronnie Schöb and Jean-François Tremblay

More articles in FinanzArchiv: Public Finance Analysis from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().