Intra-regional tax competition and economic geography

Arbeitspapier

We extent a solvable version of the core-periphery agglomeration model to four countries located in two regions. The paper shows that there might still be a race to the bottom in capital income tax rates despite agglomeration rents earned by the mobile factor. We find that intra-regional tax competition is detrimental from a welfare perspective and that tax harmonisation unambiguously makes both countries in the core region better off.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2113

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; International Fiscal Issues; International Public Goods
• Subject: tax competition ; economic geography ; race to the bottom ; Steuerwettbewerb ; Kapitalertragsteuer ; Kern-Peripherie-Beziehung ; Neue ökonomische Geographie ; Wohlfahrtseffekt ; Steuerharmonisierung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hühnerbein, Ossip ; Seidel, Tobias
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/26158