Arbeitspapier
Should tax policy favor high- or low-productivity firms?
Heterogeneous firm productivity seems to provide an argument for governments to pursue `pick-the-winner' strategies by subsidizing highly productive firms more, or taxing them less, than their less productive counterparts. We appraise this argument by studying the optimal choice of effective tax rates in an oligopolistic industry with heterogeneous firms. We show that the optimal structure of tax differentiation depends critically on the feasible level of corporate profit taxes, which in turn depends on the degree of international tax competition. When tax competition is moderate and profit taxes are high, favoring high-productivity firms is indeed the optimal policy. When tax competition is aggressive and profit taxes are low, however, the optimal tax policy is reversed and low-productivity firms are tax-favored.
- Language
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Englisch
- Bibliographic citation
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Series: BGPE Discussion Paper ; No. 130
- Classification
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Wirtschaft
Business Taxes and Subsidies including sales and value-added (VAT)
International Fiscal Issues; International Public Goods
Economic Integration
- Subject
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business taxation
firm heterogeneity
tax competition
Unternehmensbesteuerung
Ertragsteuer
Steuerbegünstigung
Unternehmen
Produktivität
Steuerwettbewerb
Optimale Besteuerung
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Langenmayr, Dominika
Haufler, Andreas
Bauer, Christian J.
- Event
-
Veröffentlichung
- (who)
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Friedrich-Alexander-Universität Erlangen-Nürnberg, Bavarian Graduate Program in Economics (BGPE)
- (where)
-
Nürnberg
- (when)
-
2012
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Langenmayr, Dominika
- Haufler, Andreas
- Bauer, Christian J.
- Friedrich-Alexander-Universität Erlangen-Nürnberg, Bavarian Graduate Program in Economics (BGPE)
Time of origin
- 2012
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Sollen multinationale Unternehmen weniger Steuern bezahlen?
Should tax policy favor high- or low-productivity firms?
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Tax competition when firms choose their organizational form : should tax loopholes for multinationals be closed?
Tax competition when firms choose their organizational form: Should tax loopholes for multinationals be closed?
Competition for Firms in an Oligopolistic Industry: Do Firms or Countries Have to Pay?
Competition for firms in an oligopolistic industry: do firms or countries have to pay?
Tax policy and the location decision of firms
Firms' financial choices and thin capitalization rules under corporate tax competition
Taxing corporations : essays on the implications of productivity differences and risk aversion
On the optimal tax policy mix when consumers and firms are imperfectly mobile
Asymmetric commodity tax competition: Are tax rates always too low?
Sollen multinationale Unternehmen weniger Steuern bezahlen?
Should tax policy favor high- or low-productivity firms?
Should tax policy favor high- or low-productivity firms?
Tax competition when firms choose their organizational form : should tax loopholes for multinationals be closed?
Tax competition when firms choose their organizational form: Should tax loopholes for multinationals be closed?
Competition for Firms in an Oligopolistic Industry: Do Firms or Countries Have to Pay?
Competition for firms in an oligopolistic industry: do firms or countries have to pay?
Tax policy and the location decision of firms
Firms' financial choices and thin capitalization rules under corporate tax competition
Taxing corporations : essays on the implications of productivity differences and risk aversion
On the optimal tax policy mix when consumers and firms are imperfectly mobile
Asymmetric commodity tax competition: Are tax rates always too low?