Public procurement in the presence of capital taxation
نویسنده
چکیده
The paper considers governments' public procurement decision as a way of influencing industry structure. In a federation in which capital is mobile and capital taxation is harmonized, a home bias in public procurement can potentially be explained as an effort to increase the capital intensity of local production and to attract taxable capital. As a result, governments may prefer domestic firms to more efficient foreign firms. JEL classification: H57, H77
منابع مشابه
Optimal Government Spending and Taxation in Three-Sector Endogenous Growth Model-Case Iran
The recent literature on taxation and growth has stressed the optimality of a zero long-run taxation on all accumulative factors of production. For a given path of government spending, the optimal tax plan requires the government to build up a positive stock of public wealth in the short run in the long-run, government spending can be financed with the income accruing from the management of the...
متن کاملAn Analysis the Effect of Capital Taxation on Allocation of Resources: A Dynamic Equilibrium Model Approach
Abstract T he return of capital is fundamental to the intertemporal allocation of resources by changing the consumption behavior and capital accumulation over time. Taxation on return of capital increases the marginal product of capital, meaning that capital stock is lower than when capital is not taxed, which results decreased growth and welfare in steady state. This pape...
متن کاملThe Welfare Effects of Switching from Consumption Taxation to Inflation Taxation in Iran’s Economy
The net effects of switching from consumption taxation to inflation taxation on resource allocation and welfare crucially depend on production externalities. With elastic labor supply, raising inflation taxation decreases leisure, but increases the levels of real consumption, capital, and output. Moreover, this tax switch has two opposing effects on the level of real money balances: A positive ...
متن کاملIncome Risks, Education, and Taxation as Public Insurance
We set up an OLG-model, where households choose human capital investment and decide on investing their endogenous savings in a portfolio of riskless and risky assets. Thereby, the households are exposed to both aggregate wage and capital risks due to technological shocks. We derive the optimal public policy mix of taxation and education policy and show that risks can be optimally diversified on...
متن کاملHuman Capital, Multiple Income Risk and Social Insurance
We set up an OLG-model, where households both choose human capital investment and decide on investing their endogenous savings in a portfolio of riskless and risky assets, exposing them to (aggregate) wage and capital risks due to technological shocks. We derive the optimal public policy mix of taxation and education policy. We show that risks can be efficiently diversified between private and ...
متن کامل