abstract the theory of international tax competition suggests that governments attempt to attract mobile capital bases by undercutting the foreign capital tax rate. an analysis of the role that state capacity plays in tax policymaking under international pressures is, however, missing. the central contribution of our study is to highlight the importance of the interaction between state capacity...

Abstract The theory of international tax competition suggests that governments attempt to attract mobile capital bases by undercutting the foreign capital tax rate. An analysis of the role that state capacity plays in tax policymaking under international pressures is, however, missing. The central contribution of our study is to highlight the importance of the interaction between state capaci...

Recent international agreements on tax data sharing aim to facilitate residence based taxation of capital and thus mitigate tax competition. I show that residence based capital tax rates can still decline with the number of financially integrated countries when public spending and debt are used strategically. While suboptimal in the steady state, strategic policies persist during transition if ...

This paper considers a Ramsey model of linear capital and labor income taxation in which the government cannot commit ex-ante to a sequence of policies for the future. In this setup, if the government is more impatient than the government, the capital income tax will always be positive in steady state. Thus, impatience and lack of commitment are able to generate positive capital taxes in the lo...

This paper develops an endogenous growth model with spillovers of public goods, Leviathan taxation, and mobile capital to examine the relative merits of centralized and decentralized fiscal systems for economic growth and social welfare. We show that a decentralized system dominates a centralized system in terms of economic growth; however, the difference in social welfare between a decentraliz...

We analyze non-cooperative commodity taxation in a two-country trade model characterized by monopolistic competition and international firm and capital mobility. In this setting, taxes in one country affect foreign welfare through the relocation of mobile firms and through changes in the rents accruing to capital owners. With consumption-based taxation, these fiscal externalities exactly offset...

Optimal Taxation with Capital Accumulation and Wage Bargaining This study examines optimal taxation in a unionized economy in which households save capital. The main findings are as follows. Judd’s (1985) and Chamley’s (1986) classical results of zero taxation on capital income holds. This is true independently of workers’ savings behaviour or the capitalists’ weight in the social welfare funct...

We analyze non-cooperative commodity taxation in a symmetric twocountry trade model characterized by monopolistic competition and international firm and capital mobility. In this setting, taxes in one country affect foreign welfare through the relocation of mobile firms and through changes in the rents accruing to capital owners. With consumption-based taxation, these fiscal externalities exact...

This paper surveys the literature on the implications of international capital mobility for national tax policies. Our main issue for consideration in this survey is whether taxation of income, specifically capital income will survive, how border crossing investment is taxed relative to domestic investment and whether welfare gains can be achieved through international tax coordination. We deve...

How do taxes affect human capital accumulation? This question has been studied extensively in the context of two model classes: overlapping generations (OLG) and infinite horizon (IH) models. These embody very different assumptions about the intergenerational transmission of physical and human capital. OLG models typically abstract from intergenerational linkages, while IH models implicitly ass...