Artificial time inconsistency as a remedy for the race to the bottom

Arbeitspapier

A long-standing concern in the literature has been that household mobility implies a serious threat to the viability of redistributive taxation. This paper considers the effects of deferred integration of migrants into the redistributive system of the target country. In a model of symmetric regions, deferred integration introduces a time consistency problem into governments' tax plans which reduces a region's incentive to undercut other regions' tax rates and can bring tax competition to a halt. On the one hand, rich migrants cease to benefit from the lower tax rate in the current period. On the other hand, the region's promise of a continuing low rate in the future is not credible. We also explore the case where poor recipients of social assistance are mobile while the rich are immobile.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 1637

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT)
• Thema: tax competition ; federalism ; mobility ; social assistance ; time consistency ; Steuerwettbewerb ; Einkommensumverteilung ; Binnenwanderung ; Soziale Integration ; Zeitkonsistenz ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Weichenrieder, Alfons J. ; Busch, Oliver
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/19101
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ