EconPapers    
Economics at your fingertips  
 

Profit Tax Competition and Formula Apportionment

Rüdiger Pethig () and Andreas Wagener

No 1011, CESifo Working Paper Series from CESifo

Abstract: We analyse tax competition with corporate income taxes in a common market where tax revenues are allocated according to an apportionment formula. Generally, tax competition is sharper (i.e., equilibrium tax rates are lower) the more tax-elastic is the apportionment formula. This depends on the properties of production technologies. In particular: (i) With fixed labour input, tax competition is sharpest if apportionment is based on property-shares, followed by the sales- and payroll-shares. (ii) If capital and labour are endogenous and technologies are Cobb-Douglas, tax competition under the property- and the payroll-share rule is sharper than under the sales-share formula. Factor elasticities determine whether payroll- or property-share apportionment generates sharper tax competition.

Keywords: tax competition; formula apportionment (search for similar items in EconPapers)
JEL-codes: D21 D81 (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-acc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23) Track citations by RSS feed

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp1011.pdf (application/pdf)

Related works:
Journal Article: Profit tax competition and formula apportionment (2007) Downloads
Working Paper: Profit Tax Competition and Formula Apportionment (2003) Downloads
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:ces:ceswps:_1011

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2021-07-13
Handle: RePEc:ces:ceswps:_1011