Mobile Tax Base as a Global Common

36 Pages Posted: 26 Nov 2007

See all articles by Kai A. Konrad

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Date Written: November 2007

Abstract

If countries anticipate Bertrand competition in tax rates, they may expend effort that makes some of their tax payers less mobile or increases the mobility of tax payers elsewhere. I provide piecemeal evidence on what activities countries use. I analyse how such activities interact with Bertrand tax competition if the size of the group of loyal and non-loyal citizens or investors is endogenous. Further I consider the implications of tax harmonization and minimum taxes for these types of non-price competition. Home attachment reduces the intensity of tax competition, but generates a strategic disadvantage for the country that invests much in such home attachment. Harmonization of taxes and high minimum taxes can intensify countries' investment in home attachment.

Keywords: tax competition, common pool, advertizing, nation brands, instilling preferences, home bias, patriotism

JEL Classification: H77, F21, F22

Suggested Citation

Konrad, Kai A., Mobile Tax Base as a Global Common (November 2007). CESifo Working Paper No. 2144, Available at SSRN: https://ssrn.com/abstract=1032563 or http://dx.doi.org/10.2139/ssrn.1032563

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

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Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Germany

IZA Institute of Labor Economics

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Bonn, 53072
Germany

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