The role of mobility in tax and subsidy competition

Arbeitspapier

In this paper, we analyse the role of mobility in tax and subsidy competition. Our primary result is that increasing relocation mobility of firms leads to increasing net tax revenues under fairly weak conditions. While enhanced relocation mobility intensifies tax competition, it weakens subsidy competition. The resulting fall in the governments' subsidy payments over-compensates the decline in tax revenues, leading to a rise in net tax revenues. We derive this conclusion in a model in which two governments are first engaged in subsidy competition and thereafter in tax competition, and firms locate and potentially relocate in response to the two political choices.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 2555

Klassifikation und Themen

• Klassifikation: Wirtschaft ; State and Local Taxation, Subsidies, and Revenue ; International Fiscal Issues; International Public Goods ; International Investment; Long-term Capital Movements ; Business Taxes and Subsidies including sales and value-added (VAT)
• Thema: Tax competition ; subsidy competition ; capital and firm mobility ; foreign direct investment ; Subvention ; Standortwettbewerb ; Steuerwettbewerb ; Direktinvestition ; Internationale Kapitalmobilität ; Auslandsproduktion ; Steueraufkommen ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Haupt, Alexander ; Krieger, Tim
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/26600
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ