Tax Competition and the Choice of Tax Structure in a Majority Voting Model

Rainald Borck

No 335, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This note studies the choice of tax structure in a majority voting model with tax competition. Regions may tax mobile capital or immobile labor. Individuals differ with respect to their relative endowments of labor and capital. Even though a lump sum tax is available, the equilibrium capital tax in a jurisdiction may be positive. In a symmetric equilibrium, this will be true if the median capital endowment is smaller than average.

Keywords: tax competition; voting (search for similar items in EconPapers)
JEL-codes: D72 H77 (search for similar items in EconPapers)
Pages: 11 p.
Date: 2003
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (33)

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