Tax competition in an expanding European Union

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Title: Tax competition in an expanding European Union
Authors: Davies, Ronald B.
Voget, Johannes
Permanent link: http://hdl.handle.net/10197/2600
Date: Nov-2008
Abstract: This paper empirically examines whether expansion of the EU has increased international tax competition. To do so, we use a simple model of tax competition to determine how a given country weights the taxes of others when choosing its own tax. This indicates that the market potential of a country (which includes both domestic consumption and exports) is the appropriate weight. This is an improvement on the adhoc and often endogenous weighting schemes used elsewhere. Unlike those studies, we find robust evidence for tax competition. In particular, our estimates suggest that EU membership affects responses with EU members responding more to the tax rates of other members. This lends credence to the above-noted concerns.
Funding Details: Not applicable
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP 09 04
Subject LCSH: Taxation--European Union countries
European Union--Membership
Intergovernmental tax relations
Other versions: http://www.ucd.ie/t4cms/wp09%2004.pdf
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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