Asymmetric Tax Competition with Formula Apportionment

Wrede M (2014)


Publication Language: English

Publication Type: Journal article

Publication year: 2014

Journal

Publisher: Springer Verlag

Book Volume: 7

Pages Range: 47-60

DOI: 10.1007/s12076-013-0100-0

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 too small. The paper shows that the (marginally) larger country levies a larger tax rate compared to the smaller country. Citizens of the larger country are worse off than those of the smaller country. The larger country employs inefficiently little capital. © 2013 Springer-Verlag Berlin Heidelberg.

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How to cite

APA:

Wrede, M. (2014). Asymmetric Tax Competition with Formula Apportionment. Letters in Spatial and Resource Sciences, 7, 47-60. https://dx.doi.org/10.1007/s12076-013-0100-0

MLA:

Wrede, Matthias. "Asymmetric Tax Competition with Formula Apportionment." Letters in Spatial and Resource Sciences 7 (2014): 47-60.

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