Economic integration and the optimal corporate tax structure with heterogeneous firms

Arbeitspapier

We study the optimal combination of corporate tax rate and tax base in a model of a small open economy with heterogeneous firms. We show that it is optimal for the small country's government to effectively subsidize capital inputs by granting a tax allowance in excess of the true costs of capital. Economic integration reduces the optimal capital subsidy and drives low-productivity firms from the small country's home market, replacing them with high-productivity exporters from abroad. This endogenous policy response creates a selection effect that increases the average productivity of home firms when trade barriers fall, in addition to the well-known direct effects.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Munich Discussion Paper ; No. 2011-14

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; International Fiscal Issues; International Public Goods ; Economic Integration
• Thema: corporate tax reform ; trade liberalization ; firm heterogeneity ; Unternehmensbesteuerung ; Besteuerungsverfahren ; Optimale Besteuerung ; Kleine offene Volkswirtschaft ; Handelsliberalisierung ; Wirtschaftsintegration ; Produktivität ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bauer, Christian ; Davies, Ronald B. ; Haufler, Andreas
• Ereignis: Veröffentlichung
• (wer): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (wo): München
• (wann): 2011

Weitere Informationen

• DOI: doi:10.5282/ubm/epub.12310
• Handle: http://hdl.handle.net/10419/104342
• URN: urn:nbn:de:bvb:19-epub-12310-6
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ