Closer Economic Integration and Corporate Tax Systems

Economic integration and the optimal corporate tax structure with heterogeneous firms

We study the optimal combination of corporate tax rate and tax base in a model of a small open economy with heterogeneous firms. We show that it is optimal for the small country’s government to effectively subsidize capital inputs by granting a tax allowance in excess of the true costs of capital. Economic integration reduces the optimal capital subsidy and drives low-productivity firms from th...

Tax evasion, "scal competition and economic integration

This paper examines the implications of tax evasion for "scal competition and tax harmonization policies in an economic union. First, for symmetric countries, it proves that the equilibrium values of the tax and audit rates are less than optimal. Tax harmonization alone will also lead to a less than optimal audit rate. Second, for asymmetric countries, the paper shows that integration may turn ...

Tax Foundation and Ernst & Young Effects of Tax Policy on Corporate Financing Decisions : Integration of the Corporate and Personal Income Tax

As the size of government continues to grow, so too does the need for reliabl e information about its cost and scope. Since 1937, the Tax Foundation has been monitoring tax and fiscal activities at all levels of government : federal, state and local. In that year, civic-minded businessmen envisioned an independent group of researchers who , by gathering data and publishing information on the pu...

Tax Policy and Corporate Borrowing

Aggregate statistics readily indicate why so many observers of financial markets in the United States are concerned about the balance between debt and equity in the corporate financial decision. Exceeding zero in most years before 1984, net equity issues by U.S. nonfinancial corporations have been negative in each year since. Net redemptions averaged approximately $80 billion annually during th...

Economic Freedom, Economic Growth And Governments Tax Revenue In (MENA)