Non-Binding Minimum Taxes May Foster Tax Competition

Konrad, Kai A.

doi:10.2139/ssrn.1664993

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Non-Binding Minimum Taxes May Foster Tax Competition

WZB Markets and Politics Working Paper No. SP II 2008-10

11 Pages Posted: 26 Aug 2010

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: March 1, 2008

Abstract

In a Stackelberg framework of capital income taxation it is shown that imposing a minimum tax rate that is lower than all countries' equilibrium tax rates in the non-cooperative equilibrium may reduce equilibrium tax rates in all countries.

Keywords: corporate income, capital income, taxation, tax competition, minimum tax, tax coordination, Stackelberg

JEL Classification: H87

Suggested Citation: Suggested Citation

Konrad, Kai A., Non-Binding Minimum Taxes May Foster Tax Competition (March 1, 2008). WZB Markets and Politics Working Paper No. SP II 2008-10, Available at SSRN: https://ssrn.com/abstract=1664993 or http://dx.doi.org/10.2139/ssrn.1664993