Riedl, Aleksandra, Rocha-Akis, Silvia. 2009. Testing the Tax Competition Theory: How Elastic are National Tax Bases in OECD Countries?, CESifo Working Paper No. 2669.
BibTeX
Abstract
To what extent do countries' corporate income tax (CIT) rates attract foreign tax bases? What are the revenue implications of a unilateral tax reduction when tax bases are internationally mobile? These questions are explored using a panel of annual data from 17 OECD countries spanning the period 1982 to 2005. We find significant international fiscal externalities in the form of CIT-induced resource flows. The magnitude, however, indicates that the extent of international corporate tax base mobility is rather modest. Moreover, we find that, on average, a unilateral CIT reduction results in a less-than-proportional increase in the CIT base, thus reducing CIT revenues. The results are robust across a wide range of specifications and point to potential gains from international tax policy coordination.
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Status of publication | Published |
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Affiliation | WU |
Type of publication | Working/discussion paper, preprint |
Language | English |
Title | Testing the Tax Competition Theory: How Elastic are National Tax Bases in OECD Countries?, CESifo Working Paper No. 2669 |
Year | 2009 |
URL | http://www.cesifo-group.de/pls/guestci/download/CESifo%20Working%20Papers%202009/CESifo%20Working%20Papers%20June%202009/cesifo1_wp2669.pdf |
Associations
- People
- Riedl, Aleksandra (Former researcher)
- Rocha-Akis, Silvia (Former researcher)
- Organization
- Department of Economics (Kartal) (Details)
- Institute for Economic Geography and GIScience IN (Details)