A Synthesis of Recent Developments in the Theory of Capital Tax Competition

Signe Krogstrup

No 04-02, EPRU Working Paper Series from Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics

Abstract: This paper proposes a unifying framework for theories of capital tax competition, and surveys and synthesizes the literature within this framework. The synthesis covers various standard tax competition models, models allowing for leviathan governments and democratic elections, in addition more recent contributions to the literature such as cross hauling of investment and models allowing for agglomeration forces to be associated with capital mobility. The paper illustrates under which assumptions the race to the bottom in tax rates results from increasing capital mobility, and when capital tax rates can be expected to increase as a result of higher capital mobility.

Keywords: tax competition; capital taxation; capital mobility (search for similar items in EconPapers)
JEL-codes: F2 H20 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2003-07
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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