Reforming an Asymmetric Union: On the Virtues of Dual Tier Capital Taxation

Episode von Volkswirtschaft - Open Access LMU - Teil 03/03 von Ludwig-Maximilians-Universität München · 1. Januar 2013

The tax competition for mobile capital, in particular the reluctance of small countries to agree on measures of tax coordination, has ongoing political and economic fallouts within Europe. We analyse the effects of introducing a two tier structure of capital taxation, where the asymmetric member states of a union choose a common, federal tax rate in the first stage, and then non-cooperatively set local tax rates in the second stage. We show that this mechanism effectively

reduces competition for mobile capital between the members of the union. Moreover,

it distributes the gains across the heterogeneous states in a way that yields a strict Pareto improvement over a one tier system of purely local tax choices. Finally, we present simulation results, and show that a dual structure of capital taxation has advantages even when side payments are feasible.

Weitere Episoden von „Volkswirtschaft - Open Access LMU - Teil 03/03“

• Revealed Distributional Preferences: Individuals vs. Teams 24. Juni 2013
• Endogenous group formation in experimental contests 22. April 2013
• Evolutionary determinants of war 22. April 2013
• Do Multinationals Transplant their Business Model? 1. April 2013
• Unexpected Consequences of Ricardian Expectations 1. April 2013
• Strong, Bold, and Kind: Self-Control and Cooperation in Social Dilemmas 1. April 2013
• Do Multinationals Transplant their Business Model? 1. April 2013
• Strong, Bold, and Kind: Self-Control and Cooperation in Social Dilemmas 1. März 2013
• The Economic Effects of the Protestant Reformation: Testing the Weber Hypothesis in the German Lands 1. März 2013
• Alliances in the Shadow of Conflict 14. Januar 2013
• Cross-border loss offset can fuel tax competition 1. Januar 2013
• The Political Economy of Educational Content and Development: Lessons from History 1. Januar 2013
• Pay What You Want as a Marketing Strategy in Monopolistic and Competitive Markets 1. Dezember 2012
• Breakdowns 1. Dezember 2012
• Pay What You Want as a Marketing Strategy in Monopolistic and Competitive Markets 1. Dezember 2012

Alle Episoden von Volkswirtschaft - Open Access LMU - Teil 03/03 · Mehr Bildung-Podcasts