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).
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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|
|Number of Pages:||27|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
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