Tax Competition Reconsidered

Myrna Wooders, Benjamin Zissimos and Amrita Dhillon (amrita.dhillon@kcl.ac.uk)

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: In a classic model of tax competition, we show that the level of public good provision and taxation in a Nash equilibrium can be efficient or inefficient with either too much, or too little public good provision. The key is whether there exists a unilateral incentive to deviate from the efficient state and, if so, whether this entails raising or lowering taxes. A priori, there is no reason to suppose the incentive is in either one direction or the other. In addition, we demonstrate conditions ensuring existence of an asymmetric Nash equilibrium with efficient public good provision. As in prior literature, local amenities enhance capital’s productivity. Prior literature, however, focuses on under-provision of public goods.

Keywords: Amenities; Asymmetric Nash equilibrium; Efficiency; Tax competition. (search for similar items in EconPapers)
Pages: 57 pages
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp622.pdf

Related works:
Journal Article: Tax Competition Reconsidered (2007)
Working Paper: Tax Competition Reconsidered (2006)
Working Paper: Tax Competition Reconsidered (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:622

Access Statistics for this paper

More papers in The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Margaret Nash (m.j.nash@warwick.ac.uk).