Tax-Competition with Involuntary Unemployment

Arbeitspapier

In the present paper we extend the classical tax-competition framework of Zodrow and Mieszkowski (1986) by modelling involuntary unemployment and by allowing for labour taxation as a second source of public funds. For a large class of production functions (including CES), it turns out that tax competition is characterized by underprovision of public goods, and by positive taxes on both labour and capital. We thus conclude that the results of Zodrow and Mieszkowski survive some important and substantial modifications of the framework, and are thus more general than recently suggested elsewhere.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3048

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation ; State and Local Taxation, Subsidies, and Revenue ; State and Local Budget and Expenditures ; Trade Unions: Objectives, Structure, and Effects
• Subject: tax competition ; capital and labour taxation ; involuntary unemployment ; efficient bargains ; Steuerwettbewerb ; Kapitalertragsteuer ; Lohnsteuer ; Steuerwirkung ; Unfreiwillige Arbeitslosigkeit ; Öffentliches Gut ; Versorgung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Eichner, Thomas ; Upmann, Thorsten
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/39041
• Last update: 10.03.2025, 11:42 AM CET