Globalisation and the Mix of Wage and Profit Taxes

This paper analyses the development of the ratio of corporate taxes to wage taxes using a simple political economy model with internationally mobile and immobile firms. Among other results, our model predicts that countries reduce their corporate tax rate, relative to the wage tax, either when preferences for public goods increase or when a rising share of capital is employed in multinational firms. The predicted relationships are tested using panel data for 23 OECD countries for the period 1980 through 2001. The results of the empirical analysis support our central hypotheses.

• Publication year

  2006

• Venue

  Social Science Research Network

• Publication date

  2006-02-01

• Fields of study

  Economics

• Identifiers
  DOI 10.5282/UBM/EPUB.885
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• The Evolution of Public Spending on Higher Education in a Democracy

  2012cited by this paper
• Structural Vector Autoregressions With Nonnormal Residuals

  2010cited by this paper
• Corruption and the shadow economy: an empirical analysis

  2010cited by this paper
• The savings-inflation puzzle

  2009cited by this paper
• Inflation Expectations and Inflation Uncertainty in the Eurozone: Evidence from Survey Data

  2008cited by this paper
• Information, Coordination, and the Industrialization of Countries

  2008cited by this paper
• Do Countries Compete over Corporate Tax Rates

  2008cited by this paper
• The Structure of Worker Compensation in Brazil, with a Comparison to France and the United States

  2008cited by this paper
• Something Out of Nothing? Neoclassical Growth and the 'Trivial' Steady State

  2008cited by this paper
• Learning, Structural Instability, and Present Value Calculations

  2007cited by this paper
• Savers, Spenders and Fiscal Policy in a Small Open Economy

  2007cited by this paper
• Nordic dual income taxation of entrepreneurs

  2007cited by this paper
• Fiscal Policy, Monopolistic Competition, and Finite Lives

  2006cited by this paper
• Bureaucratic corruption and profit tax evasion

  2006cited by this paper
• Evaluation of Researchers: A Life Cycle Analysis of German Academic Economists

  2006cited by this paper
• What Explains the Variation in Estimates of Labour Supply Elasticities?

  2006cited by this paper
• Reciprocity and Emotions When Reciprocators Know Each Other

  2006cited by this paper
• Political Competition and Convergence to Fundamentals: With Application to the Political Business Cycle and the Size of Government

  2006cited by this paper
• On human capital formation with exit options: comment and new results

  2006cited by this paper
• HONG KONG INSTITUTE FOR MONETARY RESEARCH ® A REAPPRAISAL OF THE BORDER EFFECT ON RELATIVE PRICE VOLATILITY

  2006cited by this paper
• Macroeconometric Modelling with a Global Perspective

  2006cited by this paper
• A Model of Income Insurance and Social Norms

  2006cited by this paper
• Efficient Revenue Sharing and Upper Level Governments: Theory and Application to Germany

  2006cited by this paper
• Does Money Matter in the ECB Strategy? New Evidence Based on ECB Communication

  2006cited by this paper
• Satisfaction with Democracy and the Environment in Western Europe: A Panel Analysis

  2006cited by this paper
• Efficiency Potential and Efficiency Variation in Norwegian Lower Secondary Schools

  2006cited by this paper
• Rent-Seeking Competition from State Coffers: A Calibrated DSGE Model of the Euro Area

  2006cited by this paper
• Asset Ownership and Foreign-Market Entry

  2006cited by this paper
• No . 1639 VIOLENT GROUPS AND POLICE TACTICS : SHOULD TEAR GAS MAKE CRIME PREVENTERS CRY ?

  2006cited by this paper
• Extracting Leading Indicators of Bank Fragility from Market Prices - Estonia Focus

  2006cited by this paper
• Regional Effects on Employer-Provided Training: Evidence from Apprenticeship Training in Switzerland

  2006cited by this paper
• To Go or Not to Go: Emigration from Germany

  2006cited by this paper
• On the Research Value of Large Games

  2006cited by this paper
• A model of strategic delegation in contests between groups

  2006cited by this paper
• Optimal Policy Towards Families with Different Amounts of Social Capital, in the Presence of Asymmetric Information and Stochastic Fertility

  2006cited by this paper
• Public-Private Partnership and Schooling Outcomes Across Countries

  2006cited by this paper
• The Political Economy of Intergenerational Cooperation

  2005cited by this paper
• Do Consumers Buy Less of a Taxed Good?

  2005cited by this paper
• Tax Effects, Search Unemployment, and the Choice of Educational Type

  2005cited by this paper
• Concerns for Equity and the Optimal Co-Payments for Publicly Provided Health Care

  2005cited by this paper
• Optimal Stabilization Policy with Flexible Prices

  2005cited by this paper
• Do Institutions of Direct Democracy Tame the Leviathan? Swiss Evidence on the Structure of Expenditure for Public Education

  2005cited by this paper
• Severance Pay and the Shadow of the Law: Evidence for West Germany

  2005cited by this paper
• International Capital Market Integration, Educational Choice and Economic Growth

  2005cited by this paper
• Corporate Tax Systems, Multinational Enterprises, and Economic Integration

  2005cited by this paper
• Health Values, Preference Inconsistency, and Insurance Demand

  2005cited by this paper
• Artificial Time Inconsistency as a Remedy for the Race to the Bottom

  2005cited by this paper
• Optimum taxation of life annuities

  2005cited by this paper
• Wage Bargaining and Political Strength in the Public Sector

  2005cited by this paper
• Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data

  2005influential reference
• Tax Competition When Firms Choose Their Organizational Form: Should Tax Loopholes for Multinationals Be Closed?

  2005cited by this paper
• Explaining Conflict in Low-Income Countries: Incomplete Contracting in the Shadow of the Future

  2005cited by this paper
• Income Taxation, Tuition Subsidies, and Choice of Occupation

  2005cited by this paper
• Empirical Studies

  2004cited by this paper
• Are corporate tax rates, or countries, converging?

  2004cited by this paper
• Measuring Taxes on Income from Capital: Evidence from the UK

  2003cited by this paper
• Globalisation, capital mobility and tax competition: theory and evidence for OECD countries

  2002influential reference
• Corporate income tax reforms and international tax competition

  2002cited by this paper
• Evaluating Tax Policy for Location Decisions

  2002cited by this paper
• The New Political Economy of Taxation in Advanced Capitalist Democracies

  2002cited by this paper
• Multinational Firms and the Theory of International Trade

  2002influential reference
• Preferential Regimes Can Make Tax Competition Less Harmful

  2001cited by this paper
• Empirical evidence on fiscal interdependence in OECD countries

  2001cited by this paper
• Income Shifting, Investment, and Tax Competition: Theory and Evidence from Provincial Taxation in Canada

  2001cited by this paper
• Do Taxes Influence Where U.S. Corporations Invest?

  2000cited by this paper
• The case for international tax co‐ordination reconsidered

  2000cited by this paper
• Why do governments subsidise investment and not employment

  2000cited by this paper
• Tax Evasion, Tax Competition and the Gains From Nondiscrimination: the Case of Interest Taxation in Europe

  1999cited by this paper
• Country size and tax competition for foreign direct investment

  1999influential reference
• Theories of Tax Competition

  1999influential reference
• UNEQUALLY SPACED PANEL DATA REGRESSIONS WITH AR(1) DISTURBANCES

  1999cited by this paper
• Has Globalization Gone Too Far

  1997cited by this paper
• The Correlates of Change in International Financial Regulation

  1997influential reference
• The relative importance of aggregate and sector-specific shocks at explaining aggregate and sectoral fluctuations

  1992cited by this paper
• Tax competition with two tax instruments

  1991cited by this paper
• Asymmetric tax competition

  1991influential reference
• Tax competition with interregional differences in factor endowments

  1991influential reference
• To go or not to go

  1990cited by this paper
• The Politics of 1992: Fiscal Policy and European Integration

  1990cited by this paper

• Tenure Profiles and Efficient Separation in a Stochastic Productivity Model

  2014cites this paper
• WHAT DO WE KNOW ABOUT CORPORATE TAX COMPETITION?

  2013cites this paper
• Economic Integration, Tax Erosion, and Decentralisation: An Empirical Analysis

  2013cites this paper
• Learning to Forecast the Exchange Rate: Two Competing Approaches

  2013cites this paper
• Social security and risk sharing

  2011cites this paper
• Economic integration and government size: a review of the empirical literature

  2011cites this paper
• RATE-CUTTING TAX REFORMS AND CORPORATE TAX COMPETITION IN EUROPE

  2010cites this paper
• Persistence of Innovation in Dutch Manufacturing: Is It Spurious?

  2010cites this paper
• Taxes, Mobile Capital, and Economic Dynamics in a Globalising World

  2010cites this paper
• FDI determination and corporate tax competition in a volatile world

  2010cites this paper
• Costes y beneficios de la competencia fiscal en la Unión Europea y en la España de las autonomías

  2010cites this paper
• Global Financial Transmission of Monetary Policy Shocks

  2009cites this paper
• Economic integration and the relationship between profit and wage taxes

  2009cites this paper
• Tax evasion and self-employment in a high-tax country: evidence from Sweden

  2009cites this paper
• Tax Competition in an Expanding European Union

  2008cites this paper
• No 26 / 08 Economic integration and the relationship between profit and wage taxes by Andreas Haufler

  2008cites this paper
• A Century of Shocks: The Evolution of the German City Size Distribution 1925-1999

  2008cites this paper
• Tax Competition Among Eastern and Western European Countries: With Whom Do Countries Compete?

  2008cites this paper
• Tax Competition in Europe 1980-2007 – Evidence from Dynamic Panel Data Estimation

  2008cites this paper
• Redistributive taxation, multinational enterprises, and economic integration

  2008cites this paper
• Selling favors in the lab: experiments on campaign finance reform

  2008cites this paper
• The Employment Effects of Labor and Product Market Deregulation and Their Implications for Structural Reform

  2007cites this paper
• Ageing and Growth in the Small Open Economy

  2006cites this paper
• Economic, Demographic and Political Determinants of Pollution Reassessed: A Sensitivity Analysis

  2006cites this paper
• The Pathological Export Boom and the Bazaar Effect - How to Solve the German Puzzle

  2006cites this paper
• Prospects of Regional Cooperation in Trade, Investment and Finance in Asia: An Empirical Analysis on Bimstec Countries and Japan

  2006cites this paper
• Pairwise Tests of Purchasing Power Parity Using Aggregate and Disaggregate Price Measures

  2006cites this paper
• Major Provisions of Labour Contracts and their Theoretical Coherence

  2006cites this paper
• China's Exchange Rate and International Adjustment in Wages, Prices, and Interest Rates: Japan Deja Vu?

  2006cites this paper
• Tobacco Taxation in the European Union

  2006cites this paper
• Subsidies for Wages and Infrastructure: How to Restrain Undesired Immigration

  2006cites this paper
• Marginal Employment Subsidization: A New Concept and a Reappraisal

  2006cites this paper
• African-American and White Living Standards in the 19th Century American South: A Biological Comparison

  2006cites this paper
• POISSON PROCESSES: AN APPLIED VIEW

  2006cites this paper
• A IRLINE S CHEDULE C OMPETITION : P RODUCT Q UALITY C HOICE IN A D UOPOLY M ODEL

  2006cites this paper
• C ORPORATE T AX R EFORM AND F OREIGN D IRECT I NVESTMENT IN G ERMANY –

  2006cites this paper
• C OMPANY T AX R EFORM IN E UROPE AND ITS E FFECT ON C OLLUSIVE B EHAVIOR

  2006cites this paper
• W AGE B ARGAINING AND M ULTINATIONAL F IRMS IN G ENERAL E QUILIBRIUM

  2006cites this paper
• FINANCIAL GLOBALIZATION

  2006cites this paper
• Construction contracts (or "how to get the right building at the right price?")

  2006cites this paper
• Empirical Estimation Results of a Collective Household Time Allocation Model

  2006cites this paper
• “Itô's Lemma” and the Bellman Equation for Poisson Processes: An Applied View

  2006cites this paper
• Risk Selection in Natural Disaster Insurance - the Case of France

  2006cites this paper
• Do IMF and World Bank Influence Voting in the Un General Assembly?

  2006cites this paper
• Choosing Intellectual Protection: Imitation, Patent Strength and Licensing

  2006cites this paper
• What's the Monetary Value of Distributive Justice?

  2006cites this paper
• Fool the Markets? Creative Accounting, Fiscal Transparency and Sovereign Risk Premia

  2006cites this paper
• MULTINATIONAL LABOR SUBSTITUTION

  2006cites this paper
• Job Security and Work Absence: Evidence from a Natural Experiment

  2006cites this paper
• On the Size of the Winning Set in the Presence of Interest Groups

  2006cites this paper
• 1711 WAGE BARGAINING AND MULTINATIONAL FIRMS IN GENERAL EQUILIBRIUM

  2006cites this paper
• Corporate Tax Reform and Foreign Direct Investment in Germany - Evidence from Firm-Level Data

  2006cites this paper
• Optimal Taxation and Social Insurance in a Lifetime Perspective

  2006cites this paper
• Modelling Structural Breaks in the Us, UK and Japanese Unemployment Rates

  2006cites this paper
• Business Cycle Dynamics of a New Keynesian Overlapping Generations Model with Progressive Income Taxation

  2006cites this paper
• Monetary Transmission Mechanism in Transition Economies: Surveying the Surveyable

  2006cites this paper
• Cycles and Indeterminacy in Overlapping Generations Economies with Stone-Geary Preferences

  2006cites this paper
• The Role of Fiscal Policy in a Monetary Union: Are National Automatic Stabilizers Effective?

  2006cites this paper
• Does Financial Integration Spur Economic Growth? New Evidence from the First Era of Financial Globalization

  2006cites this paper
• Reevaluating the Role of Trade Agreements: Does Investment Globalization Make the WTO Obsolete?

  2006cites this paper
• Negative Reciprocity and the Interaction of Emotions and Fairness Norms

  2005cites this paper