Optimal income taxation with tax competition

We introduce tax competition for mobile labor into an optimal-taxation model with two skill levels. We analyze a symmetric subgame-perfect Nash equilibrium of the game between two governments and two taxpayer populations. Tax competition reduces the distortion from the informational asymmetry and increases employment of the less productive individuals. When countries are heterogeneous, this effect is more pronounced in the smaller country.

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Year of publication:	2010
Authors:	Lipatov, Vilen ; Weichenrieder, Alfons J.
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	Einkommensteuer \| Steuerwettbewerb \| Optimale Besteuerung \| Internationale Arbeitsmobilität \| Qualifikation \| Spieltheorie \| Nash-Gleichgewicht \| Leviathan-Modell \| Beschäftigungseffekt \| Theorie \| optimal income tax \| migration \| unemployment \| tax competition \| Leviathan government

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Series:	CESifo Working Paper ; 3108
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	630873135 [GVK] hdl:10419/39036 [Handle]
Classification:	F22 - International Migration ; H21 - Efficiency; Optimal Taxation
Source:	EconStor

Persistent link: https://www.econbiz.de/10010277220