Asymmetric tax competition with formula apportionment
Matthias Wrede ()
Letters in Spatial and Resource Sciences, 2014, vol. 7, issue 1, 47-60
This paper analyzes asymmetric tax competition under formula apportionment. It sets up a model with multinationals where two welfare-maximizing jurisdictions of different size levy source-based corporate taxes and allocate taxes using the formula approach. At the Nash equilibrium, tax rates are too low and public goods quantities are too small. The paper shows that the (marginally) larger country levies a larger tax rate compared to the smaller country. Citizens of the larger country are worse off than those of the smaller country. The larger country employs inefficiently little capital. Copyright Springer-Verlag Berlin Heidelberg 2014
Keywords: Multinational enterprises; Corporate taxation; Formula apportionment; Asymmetric tax competition; H25; H42; H73 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Asymmetric Tax Competition with Formula Apportionment (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:lsprsc:v:7:y:2014:i:1:p:47-60
Ordering information: This journal article can be ordered from
Access Statistics for this article
Letters in Spatial and Resource Sciences is currently edited by Henk Folmer and Amitrajeet A. Batabyal
More articles in Letters in Spatial and Resource Sciences from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().