Progressive and Regressive Equilibria in a Tax Competition Game

James Green-Armytage

Public Finance Review, 2017, vol. 45, issue 3, 307-333

Abstract: This article models interjurisdictional competition over nonlinear taxes on the incomes of mobile individuals. Each individual has exogenous wealth and a location preference that is drawn from a continuous distribution. We find that more concave utility of consumption functions lead to more progressive tax structures, as richer people place less value on marginal consumption relative to location. In the benchmark model, a relative risk aversion coefficient of one is the boundary between progressivity and regressivity. The exercise helps us to understand which types of jurisdictions are more likely to have progressive taxes as their optimal policies.

Keywords: tax competition; optimal taxation; nonlinear taxes; migration; Nash equilibrium taxes (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
http://pfr.sagepub.com/content/45/3/307.abstract (text/html)

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:sae:pubfin:v:45:y:2017:i:3:p:307-333

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().