IDEAS home Printed from https://ideas.repec.org/a/mhr/finarc/urnsici0015-2218(200803)641%3E33ftcitp__33ftcitp.html
   My bibliography  Save this article

Fighting Tax Competition in the Presence of Unemployment: Complete versus Partial Tax Coordination

Author

Listed:
  • Sven Wehke

Abstract

We analyze the welfare consequences of tax coordination agreements that cover taxes on mobile capital and on immobile labor. In doing so, we take into account two important institutional details. First, we incorporate decentralized wage bargaining, giving rise to involuntary unemployment. Second, we distinguish between complete tax coordination, which effectively covers both tax instruments, and the more plausible case of partial tax coordination, where one tax is marginally increased by all countries, while the other tax rate can still be freely chosen by all countries. It is shown that complete tax coordination remains welfare-enhancing in the presence of unemployment. In contrast, for partial tax coordination, the welfare effect becomes ambiguous and is different to the case of competitive labor markets.

Suggested Citation

  • Sven Wehke, 2008. "Fighting Tax Competition in the Presence of Unemployment: Complete versus Partial Tax Coordination," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(1), pages 33-62, March.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200803)64:1>33:ftcitp__33:ftcitp
    DOI: 10.1628/001522108X312069
    as

    Download full text from publisher

    File URL: https://www.mohrsiebeck.com/en/article/fighting-tax-competition-in-the-presence-of-unemployment-complete-versus-partial-tax-coordination-101628001522108x312069
    Download Restriction: Fulltext access is included for subscribers to the printed version.
    File URL: https://libkey.io/10.1628/001522108X312069?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kangoh Lee, 2021. "Labor market frictions, capital, taxes and employment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(6), pages 1329-1359, December.

    More about this item

    Keywords

    Factor taxation; (partial) tax coordination; wage bargaining; unemployment;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mhr:finarc:urn:sici:0015-2218(200803)64:1>33:ftcitp__33:ftcitp. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Wolpert (email available below). General contact details of provider: https://www.mohrsiebeck.com/fa .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.