 Coordination and the fight against tax havensKai Konrad and Tim B. M. Stolper Munich Reprints in Economics from University of Munich, Department of Economics Abstract: The success or failure of the fight against tax havens is the outcome of a many player coordination game between a tax haven and its potential investors. Key determinants are the costly international pressure and the size of the haven country's revenue pool. The latter is determined endogenously by the decisions of many individual investors. Our analysis suggests a non-standard market model that explains why haven countries would ever comply with international standards of transparency despite the large empirically observable returns in the tax haven business. It also alludes to why service fees in tax havens can be positive despite a competitive financial market with multiple tax havens. Furthermore, we identify a trade-off between the fight against tax havens and high tax rates. Finally, low fines for disclosed offshore tax evasion, e.g. in special programs for tax evaders who voluntarily report their offshore wealth, strengthen haven countries against international pressure. (C) 2016 Elsevier B.V. All rights reserved. Date: 2016 Published in Journal of international Economics 103(2016): pp. 96-107 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:lmu:muenar:43481 Access Statistics for this paper More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC. |
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