Even Small Trade Costs Restore Efficiency in Tax Competition

Runkel, Marco and Becker, Johannes (2011) Even Small Trade Costs Restore Efficiency in Tax Competition. In: Annual Symposium 2011.

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We introduce transport cost of trade in products into the classical Zodrow and Mieszkowski (1986) model of capital tax competition. It turns out that even small levels of transport cost lead to a complete breakdown of the seminal result, the underprovision of public goods. Instead, there is a symmetric equilibrium with efficient public goods provision in all jurisdictions.

Item Type: Conference or Workshop Item (Speech)
Keywords: tax competition, public goods provision, trade
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation
Date Deposited: 30 May 2012 13:06
Last Modified: 23 Oct 2015 14:07
URI: http://eureka.sbs.ox.ac.uk/id/eprint/3681

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