Competition in unit vs. ad valorem taxes
Lockwood, Ben (2001) Competition in unit vs. ad valorem taxes. Working Paper. Coventry: University of Warwick. Centre for the Study of Globalisation and Regionalisation. Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation) (No.86/).
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This note shows that in the Sodrow-Miesowski-Wilson model, the Nash equilibrium in capital taxes depends on whether these taxes are unit (as assumed in the literature) or ad valorem (as in reality). In a symmetric version of the model with cobb-Douglas technology, public good provision is higher, and residents in both countries are better off, when countries compete in unit taxes.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HJ Public Finance|
|Divisions:||Faculty of Social Sciences > Economics
Faculty of Social Sciences > Centre for the Study of Globalisation and Regionalisation
|Library of Congress Subject Headings (LCSH):||Ad valorem tax, Unit pricing, Competition, International, Taxation -- Mathematical models, Public goods|
|Series Name:||Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation)|
|Publisher:||University of Warwick. Centre for the Study of Globalisation and Regionalisation|
|Place of Publication:||Coventry|
|Official Date:||June 2001|
|Number of Pages:||13|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
S. Bucovetsky (1991) “Asymmetric tax competition”, Journal of Urban Economics 30, 67-81
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