Asymmetric tax competition with formula apportionment

Arbeitspapier

This paper analyzes asymmetric tax competition under formula apportionment. It sets up a model with multinationals where two welfare-maximizing jurisdictions of different size levy source-based corporate taxes and allocate taxes using the formula approach. At the Nash equilibrium, tax rates are too low and public goods quantities are to small. The paper shows that the larger country levies a larger tax rate compared to the smaller country as it does under separate accounting. Citizens of the larger country are worse off than those of the smaller country.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MAGKS Joint Discussion Paper Series in Economics ; No. 2009,43

Classification and Topics

• Classification: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; Publicly Provided Private Goods ; State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
• Subject: Multinational enterprises ; corporate taxation ; formula apportionment ; asymmetric tax competition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Wrede, Matthias
• Event: Veröffentlichung
• (who): Philipps-University Marburg, Faculty of Business Administration and Economics
• (where): Marburg
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30143
• Last update: 10.03.2025, 11:43 AM CET