Profit Tax Competition and Formula Apportionment

Arbeitspapier

We analyse tax competition with corporate profit taxes in a common market where tax revenues are allocated according to an apportionment formula. As a general rule, tax competition is sharper the higher is the tax elasticity of the apportionment formula which, in turn, depends on the properties of production technologies. In particular: (i) If labour input is fixed, tax competition is sharpest if apportionment is based on property shares, followed by the sales and payroll shares. (ii) If capital and labour are endogenous and technologies are Cobb-Douglas, tax competition under the property- and the payroll-share rule is sharper than under the output-share formula. Whether payroll- or property-share apportionment generates sharper tax competition, depends on factor elasticities.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Volkswirtschaftliche Diskussionsbeiträge ; No. 106-03

Classification and Topics

• Classification: Wirtschaft ; Criteria for Decision-Making under Risk and Uncertainty ; Firm Behavior: Theory
• Subject: Tax Competition ; Formula Apportionment ; Unternehmensbesteuerung ; Steuerwettbewerb ; Multinationales Unternehmen ; Außensteuerrecht ; Konzernbesteuerung ; Doppelbesteuerung ; Verrechnungspreis ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pethig, Rüdiger ; Wagener, Andreas
• Event: Veröffentlichung
• (who): Universität Siegen, Fakultät III, Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht
• (where): Siegen
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/83191
• Last update: 10.03.2025, 11:43 AM CET