Strategic delegation and international capital taxation

Matthias Brückner

No B 22-2001, ZEI Working Papers from University of Bonn, ZEI - Center for European Integration Studies

Abstract: The literature on tax competition generally concludes that international coordination of capital taxes among symmetric countries increases tax rates. This paper investigates whether this conclusion also holds in a political economy framework where taxes are set by elected policy makers. It shows that policy makers are fiscally more liberal than the average citizen if taxes are set non-cooperatively. However, fiscally more conservative policy makers are elected if taxes are set cooperatively. The introduction of tax coordination cannot remove the incentive to compete for foreign capital, but simply shifts it to the election stage. The paper proves that with standard specifications of the utility functions, coordination leads to lower tax rates than competition.

Keywords: Tax competition; tax coordination; strategic delegation (search for similar items in EconPapers)
JEL-codes: H2 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/39543/1/338027831.pdf (application/pdf)

Related works:
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:zbw:zeiwps:b222001

Access Statistics for this paper

More papers in ZEI Working Papers from University of Bonn, ZEI - Center for European Integration Studies Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().