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Strategic Capital Taxation in Large Open Economies with Mobile Capital

Author

Listed:
  • Jiming Ha

    (International Monetary Fund)

  • Anne Sibert

    (University of London and CEPR)

Abstract

The purpose of this paper is to provide a methodology for computing time-consistent, strategic capital taxes in a large open economy and to analyze the nature of these taxes. Our results suggest that even if a full set of nondistortionary taxes is unavailable and even if the government has redistributive goals, the country which imports capital should tax corporate capital and the capital exporter should subsidize it. We perform comparative statics experiments to show how strategically chosen taxes vary with the parameters of the model. JEL classifications: H21, E62

Suggested Citation

  • Jiming Ha & Anne Sibert, 1997. "Strategic Capital Taxation in Large Open Economies with Mobile Capital," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(3), pages 243-262, July.
    • Handle: RePEc:kap:itaxpf:v:4:y:1997:i:3:d:10.1023_a:1008608219706
    DOI: 10.1023/A:1008608219706
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    References listed on IDEAS

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    Cited by:

    1. Gross, Till, 2014. "Equilibrium capital taxation in open economies under commitment," European Economic Review, Elsevier, vol. 70(C), pages 75-87.
    2. Cees Withagen & Alex Halsema, 2013. "Tax competition leading to strict environmental policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 434-449, June.
    3. Till Gross, 2013. "Dynamic Optimal Taxation in Open Economies," Carleton Economic Papers 13-06, Carleton University, Department of Economics.
    4. Quadrini, Vincenzo & Ríos-Rull, José-Víctor, 2024. "International tax competition with rising intangible capital and financial globalization," Journal of Monetary Economics, Elsevier, vol. 141(C), pages 101-120.
    5. Soojin Kim, 2014. "The Effects of Labor Migration on Optimal Taxation: An International Tax Competition Analysis," 2014 Meeting Papers 508, Society for Economic Dynamics.
    6. Quadrini, Vincenzo, 2005. "Policy commitment and the welfare gains from capital market liberalization," European Economic Review, Elsevier, vol. 49(8), pages 1927-1951, November.
    7. Mutsumi Matsumoto, 2019. "Production inefficiency, cross-ownership and regional tax-range coordination," Economics of Governance, Springer, vol. 20(4), pages 371-388, December.
    8. Mr. Geremia Palomba, 2004. "Capital Income Taxation and Economic Growth in Open Economies," IMF Working Papers 2004/091, International Monetary Fund.
    9. Till Gross, 2013. "Capital Tax Competition and Dynamic Optimal Taxation," Carleton Economic Papers 13-08, Carleton University, Department of Economics.

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    More about this item

    Keywords

    capital taxation; capital mobility;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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