 The gains from preferential tax regimes reconsideredCarl Gaigne and Ian Wooton (ian.wooton@strath.ac.uk) Post-Print from HAL Abstract: The EU policy against harmful tax competition aims at eliminating tax policies targeted at attracting the internationally mobile tax base. We construct an imperfectly competitive model of costly trade between two countries. In setting their corporate taxes, governments non-cooperatively decide whether to discriminate between internationally mobile and immobile firms. We find the Nash equilibrium tax regimes. When trade costs are high countries impose a uniform tax on all firms while nations will discriminate between mobile and immobile firms when costs are low. At some trade costs, fiscal competition results in tax discrimination despite uniform taxation being socially preferable. Keywords: preferential tax regimes; tax competition; imperfect competition; trade costs; international trade; tax; international economics; economic modelling; coût de transaction; commerce international; taxe; économie internationale; modélisation économique (search for similar items in EconPapers) Published in Regional Science and Urban Economics, 2011, 41 (1), pp.59-66. ⟨10.1016/j.regsciurbeco.2010.08.002⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01462635 DOI: 10.1016/j.regsciurbeco.2010.08.002 Access Statistics for this paper More papers in Post-Print from HAL |
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