2013
DOI: 10.1007/s12076-013-0100-0
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Abstract: 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… Show more

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Cited by 3 publications
(3 citation statements)
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“…Even though country asymmetries have been investigated in each of these extensions (e.g. Bucovetsky & Smart, ; Wrede, ), the combination of both extensions renders the analysis of country asymmetries in our framework analytically intractable.…”
Section: Asymmetric Countriesmentioning
confidence: 99%
“…Even though country asymmetries have been investigated in each of these extensions (e.g. Bucovetsky & Smart, ; Wrede, ), the combination of both extensions renders the analysis of country asymmetries in our framework analytically intractable.…”
Section: Asymmetric Countriesmentioning
confidence: 99%
“…19 To illustrate this point, let us suppose that governments care for the well-being of a representative citizen in their countries. The approach is inspired by Pinto (2007), Wrede (2014) or Matsumoto (2016).…”
Section: Welfare Maximizationmentioning
confidence: 99%
“…The assumption is not easily replaced, however. First, tax competition with formulary apportionment and asymmetric players is notoriously complex to analyze in itself (Wrede, 2014). 20 Moreover, imitative learning among asymmetric agents is a conceptually tricky issue (Alós-Ferrer and Schlag, 2009).…”
mentioning
confidence: 99%