Intra-regional Tax Competition and Economic Geography

Ossip Hühnerbein and Tobias Seidel

No 2113, CESifo Working Paper Series from CESifo

Abstract: We extent a solvable version of the core-periphery agglomeration model to four countries located in two regions. The paper shows that there might still be a race to the bottom in capital income tax rates despite agglomeration rents earned by the mobile factor. We find that intra-regional tax competition is detrimental from a welfare perspective and that tax harmonisation unambiguously makes both countries in the core region better off.

Keywords: tax competition; economic geography; race to the bottom (search for similar items in EconPapers)
Date: 2007
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Related works:
Journal Article: Intra‐regional Tax Competition and Economic Geography (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2113

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