Even small trade costs restore efficiency in tax competition

Arbeitspapier

We introduce transport cost of trade in products into the classical Zodrow and Mieszkowski (1986) model of capital tax competition. It turns out that even small levels of transport cost lead to a complete breakdown of the seminal result, the underprovision of public goods. Instead, there is a symmetric equilibrium with efficient public goods provision in all jurisdictions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3221

Classification and Topics

• Classification: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; Multinational Firms; International Business
• Subject: tax competition ; public goods provision ; trade ; Kapitalertragsteuer ; Steuerwettbewerb ; Öffentliches Gut ; Versorgung ; Gleichgewichtstheorie ; Transportkosten ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Becker, Johannes ; Runkel, Marco
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/46322
• Last update: 10.03.2025, 11:45 AM CET