Globalisation and the mix of wage and profit taxes

This paper analyses the development of the ratio of corporate taxes to wage taxes using a simple political economy model with internationally mobile and immobile firms. Among other results, our model predicts that countries reduce their corporate tax rate, relative to the wage tax, either when preferences for public goods increase or when a rising share of capital is employed in multinational firms. The predicted relationships are tested using panel data for 23 OECD countries for the period 1980 through 2001. The results of the empirical analysis support our central hypotheses.

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Year of publication:	2006
Authors:	Haufler, Andreas ; Klemm, Alexander ; Schjelderup, Guttorm
Publisher:	Munich : Center for Economic Studies and Ifo Institute (CESifo)
Subject:	Unternehmensbesteuerung \| Lohnsteuer \| Steuerbelastung \| Public Choice \| Globalisierung \| Internationale Kapitalmobilität \| Multinationales Unternehmen \| Steuerwettbewerb \| Schätzung \| OECD-Staaten \| capital and labour taxes \| economic integration \| multinational firms

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Series:	CESifo Working Paper ; 1678
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	510026559 [GVK] hdl:10419/19142 [Handle]
Classification:	H73 - Interjurisdictional Differentials and Their Effects ; H20 - Taxation, Subsidies, and Revenue. General ; F23 - Multinational Firms; International Business ; F15 - Economic Integration
Source:	EconStor