Ad Valorem Capital Tax Competition
Hikaru Ogawa and
No CIRJE-F-1030, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo
Studies of tax competition have found that using a unit tax is commitment-robust for governments, while we observe ad valorem taxes on capital in practice. This study presents a model that explains the emergence of ad valorem capital tax competition, incorporating an elastic supply of capital in the standard tax competition model. Specifically, it shows that if the elasticity of capital supply is positive, governments adopt the ad valorem tax method and thereby ad valorem tax competition prevails. On the other hand, under a fixed capital supply (i.e., zero elasticity of capital supply), countries compete in unit taxes.
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2016cf1030
Access Statistics for this paper
More papers in CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo Contact information at EDIRC.
Bibliographic data for series maintained by CIRJE administrative office ().