Taxing capital and labor when both factors are imperfectly mobile internationally

Agnès Benassy-Quere and Hippolyte d'Albis

PSE Working Papers from HAL

Abstract: We revisit the standard theoretical model of tax competition to consider imperfect mobility of both capital and labor. We show that the mobility of one factor affects the taxation of both factors, and that the "race-to-the-bottom" narrative (with burden shifting) applies essentially to capital-exporting countries. We validate our predictions using a panel of 29 OECD countries over the period 1997-2017. The quantitative contribution of rising capital mobility to the decline of corporate income tax rates over our sample period is nonetheless less than that of population ageing.

Keywords: Tax competition; Globalization; Imperfect factor mobility (search for similar items in EconPapers)
Date: 2021-02
New Economics Papers: this item is included in nep-pub
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03134050v1
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Related works:
Journal Article: Taxing capital and labor when both factors are imperfectly mobile internationally (2022)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2022)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2022)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2021)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2019)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2019)
Working Paper: Taxing capital and labor when both factors are imperfectly mobile internationally (2018)
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