Tax incidence, majority voting and capital market integration
Lockwood, Ben and Makris, Miltiadis (2004) Tax incidence, majority voting and capital market integration. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.712).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
We re-examine, from a political economy perspective, the standard view that higher capital mobility results in lower capital taxes - a view, in fact, that is not confirmed by the available empirical evidence. We show that when a small economy is opened to capital mobility, the change of incidence of a tax on capital - from capital owners to owners of the immobile factor - may interact in such a way with political decision-making so as to cause a rise in the equilibrium tax. This can happen whether or not the fixed factor (labour) can be taxed.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HG Finance|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Capital movements, Taxation -- Econometric models, Capital levy, Equilibrium (Economics)|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||June 2004|
|Number of Pages:||27|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
1. Bailey, W., Y. Chung, and J.Kang, Jun ”Foreign Ownership Restrictions and Equity Price Premiums: What Drives the Demand for Cross-Border Investments?”, : Journal of Financial and Quantitative Analysis 34, 489-511, 1999
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