This paper deals with tax-policy responses to quasi-hyperbolic discounting. Earlier research on optimal paternalism typically abstracts from capital mobility. If capital is mobile between countries, it may no longer be possible for national governments to control domestic savings via capital taxation (as in a closed economy). In this paper, we take a broad perspective on public policy responses...

Many expect globalization and regional economic integration to force domestic institutions and policies to converge toward some efficiency-mandated minimalism. Applying basic trade theory to national institutional and policy systems clarifies, however, that the greater force is tax competition (broadly conceived), as abetted by ideology and transmitted and magnified by international financial m...

Financial instability has increased for many economies in the face of greater capital mobility. Eliminating capital flows, especially portfolio investment flows, may reduce volatility, but it could also result in domestic capital constraints. To overcome this dilemma, policymakers may consider alternatives, such as progressive income taxation, that could raise domestic funds. In this paper, we ...

We study the dynamic taxation of capital and labor in the neoclassical growth model under the assumption that taxes and public good provision are decided by a self-interested politician who cannot commit to policies. Citizens can imperfectly control the politician using elections similar to a political agency model. As in the standard dynamic taxation models, we only allow for linear taxes on c...

Article history: Received 29 July 2014 Received in revised form 3 October 2015 Accepted 5 October 2015 Available online 22 October 2015 This paper examines the relationship between tax competition and fiscal equalization in a standard tax competition model with repeated actions, in which regions differ in per capita capital endowments and production technologies. In particular, it asks how a fi...

This paper investigates the importance of political ideology and opportunism in the choice of the tax structure. In particular, we examine the effects of cabinet ideology and elections on the distribution of the tax burden across factors of production and consumption for 21 OECD countries over the period 1970-2000 by employing four alternative cabinet ideology measures and by using the methodol...

Social scientists have long recognized that time-series-cross-section (TSCS) data typically correlate across time and space. Today, standard social-science practice is to model dynamics (i.e., temporal dependence) directly, typically with lags of the dependent variable, but to address spatial dependence solely by applying panel-corrected (robust) standard-errors (PCSE), thereby treating spatial...

a r t i c l e i n f o JEL classification: F23 H25 Keywords: Corporate taxation International profit shifting Real options FDI The relation between taxation states and foreign direct investment (FDI) has been studied from several perspectives and with states at different levels of development. Most previous studies, however, have only considered the impact of tax level on FDI volume. This paper ...