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Strategic Taxation on Mobile Capital with Spillover Externality

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  • Hikaru Ogawa

Abstract

By incorporating spillover externality into the model, a generalization of the strategic tax competition model is attempted to find the equilibrium tax rates chosen by both capital import and export jurisdictions. The result shows that jurisdictions not only choose their capital tax rates to manipulate the terms of trade, but also adjust them to control capital allocation among the jurisdictions to receive appropriate benefit spillovers.

Suggested Citation

  • Hikaru Ogawa, 2007. "Strategic Taxation on Mobile Capital with Spillover Externality," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 33-45, March.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200703)63:1_33:stomcw_2.0.tx_2-b
    DOI: 10.1628/001522107X186700
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    Cited by:

    1. Rosella Levaggi & Paolo M. Panteghini, 2021. "Public expenditure spillovers: an explanation for heterogeneous tax reaction functions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(3), pages 497-514, June.

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    More about this item

    Keywords

    tax competition; spillover; fiscal externality; pecuniary externality;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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