Taxing capital and labor when both factors are imperfectly mobile internationally
Pré-publication, Document de travail: We revisit the standard theoretical model of tax competition to consider imperfect mobility of both capital and labor. We show that the mobility of one factor affects the taxation of both factors, and that the race-to-the-bottom narrative (with burden shifting) applies essentially to capital exporting countries. We test our predictions for a panel of 28 OECD countries over 1997-2014. We find capital taxation to be less sensitive to capital mobility in net capital importing countries than for net capital exporters. We also show that labor mobility has a negative impact on labor taxation but a positive impact on capital taxation. Finally, we show evidence of a non-linear effect of labor mobility on capital taxation depending on the level of skills.
Auteur(s)
Hippolyte d’Albis, Agnès Bénassy-Quéré, Amélie Schurich-Rey
Date de publication
- 2018
Mots-clés JEL
Mots-clés
- Tax competition
- Globalization
- Imperfect factor mobility
Référence interne
- PSE Working Papers n°2018-40
URL de la notice HAL
Version
- 1