UNSPECIFIED (2004) Competition in unit vs. ad valorem taxes. INTERNATIONAL TAX AND PUBLIC FINANCE, 11 (6). pp. 763-772. ISSN 0927-5940

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Abstract

This paper shows that in a standard model of tax competition, 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, general results are established: taxes and public good provision are both higher, and residents in all countries are better off, when countries compete in unit taxes, as opposed to ad valorem taxes. However, the difference in equilibrium outcomes is negligible when the number of countries is large.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions
Journal or Publication Title:	INTERNATIONAL TAX AND PUBLIC FINANCE
Publisher:	KLUWER ACADEMIC PUBL
ISSN:	0927-5940
Date:	November 2004
Volume:	11
Number:	6
Number of Pages:	10
Page Range:	pp. 763-772
Publication Status:	Published
URI:	http://wrap.warwick.ac.uk/id/eprint/7890

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