Title

Is it Tax Competition or Tax Exporting

Department

Economics, Finance, & Quantitative Analysis

Document Type

Article

Publication Date

11-2003

Abstract

This paper extends the basic tax-competition model to a framework in which jurisdictions have market power over the price of the output produced within their borders. If firms within the jurisdiction are competitive, the jurisdiction can play the role of monopoly-rent collector by using taxes to restrict the level of output. It is shown that the basic tax competition model can be thought of as a special case of this more general framework. In this framework, the opportunity to export the tax burden can partially or fully offset the well-known effects identified by the tax competition model.

Journal

Journal of Urban Economics

Journal ISSN

0094-1190

Volume

54

Issue

3

First Page

639

Last Page

647

Digital Object Identifier (DOI)

10.1016/j.jue.2003.07.001