Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/264734 
Erscheinungsjahr: 
2008
Schriftenreihe/Nr.: 
Working Paper No. 142
Verlag: 
Oesterreichische Nationalbank (OeNB), Vienna
Zusammenfassung: 
In this paper, we test one of the fundamental assumptions in the tax competition literature, namely, that a country's taxable income depends on the tax policies pursued in the domestic and in neighbouring countries. Based on a panel of annual data of 14 Western European countries spanning the period 1982 to 2004, we show that the common trend in falling corporate income tax (CIT) rates can in part be explained by the existence of fiscal externalities in the form of international resource flows. Our results confirm the presumption put forward in recent empirical tax reaction function studies, that interdependent tax setting behaviour is evidence of tax competition. However, taxable corporate income is shown to react inelastically to domestic and to foreign tax rates. Thus, the observed rise in CIT revenues in Europe between 1982 and 2004 cannot be explained by the trend in falling CIT rates. Moreover, we find that large countries' tax bases are more responsive to neighbouring countries' tax policies, which is in contrast to the classic asymmetric tax competition literature.
Schlagwörter: 
tax competition
corporate income tax base elasticity
asymmetric countries
instrumental variables
spatial econometrics
JEL: 
H71
H72
H77
H87
C21
C23
Dokumentart: 
Working Paper

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