Migration And The Welfare State: Political-Economy Perspective On Tax Competition

Assaf Razin

No 48, 2013 Meeting Papers from Society for Economic Dynamics

Abstract: The paper revisit the issue of whether tax competition is a race to the bottom. I analyze tax competion among a continuum of competing host countries facing an upward†sloping supply of would be igrants. Capital move freely across the host country economies. I show how the fiscal burden of migration brings out a tax competition equilibrium whereby taxes on labor and capital income are higher than under a coordination equilibrium.I then introduce foreign direct investment and show how it counteract the forces for high taxation.

Date: 2013
New Economics Papers: this item is included in nep-acc, nep-mig, nep-pbe and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed013:48

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