Taxing capital and labor when both factors are imperfectly mobile internationally

We revisit the standard theoretical model of tax competition to consider imperfect mobility of both capital and labor. We show that the mobility of one factor affects the taxation of both factors and that the ”race-to-the-bottom” narrative (with burden shifting) applies essentially to capital-export...

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Detalles Bibliográficos
Autores principales: d’Albis, Hippolyte, Bénassy-Quéré, Agnès
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer US 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7993084/
https://www.ncbi.nlm.nih.gov/pubmed/33785985
http://dx.doi.org/10.1007/s10797-021-09663-4
Descripción
Sumario:We revisit the standard theoretical model of tax competition to consider imperfect mobility of both capital and labor. We show that the mobility of one factor affects the taxation of both factors and that the ”race-to-the-bottom” narrative (with burden shifting) applies essentially to capital-exporting countries. We validate our predictions using a panel of 29 OECD countries over the period of 1997–2017. The quantitative contribution of rising capital mobility to the decline of corporate income tax rates over our sample period is nonetheless less than that of population ageing.