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The Political Economy of Corporate Tax Harmonization: Why Do European Politicians (Dis)like Minimum Tax Rates?

Steffen Osterloh () and Friedrich Heinemann ()

No 08-108, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Setting minimum tax rates is a well discussed way of mitigating pressure from tax competition. This paper investigates which motives shape the support for a minimum corporate tax among politicians. We make use of a unique data base: a survey among members of the European parliament. Our results confirm that the politicians' ideology as well as individual characteristics such as educational background exert a major in uence. Moreover, several predictions regarding national interests are derived from various standard tax competition models. These hypotheses are partly supported by the data; in particular, different national preferences for social equality shape the support. A comparison with survey results from the German Bundestag reveals that German politicians on the national level do not show different preferences towards tax rate harmonization.

Keywords: company taxation; tax harmonization; political economy; European Parliament (search for similar items in EconPapers)
JEL-codes: D78 H25 H87 (search for similar items in EconPapers)
Date: 2008
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Journal Article: The political economy of corporate tax harmonization — Why do European politicians (dis)like minimum tax rates? (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:7498

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