Is it Tax Competition or Tax Exporting
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 Title
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
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