Who Benefits from Partial Tax Coordination?

Download or read book Who Benefits from Partial Tax Coordination? written by Yutao Han and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we investigate whether partial tax coordination is beneficial to countries within and outside a tax union, in which countries are supposed to compete in taxes and infrastructure. Our results demonstrate that a subgroup of countries agreeing on a common tax rate can harm both member and nonmember states. This is in contrast to the classical findings that partial tax harmonisation is Pareto improving. When a minimum tax rate is imposed within a tax union, we demonstrate that it does not necessarily improve the welfare of the member countries. Moreover, both the high-tax and low-tax countries can be worse off. This conclusion is at odds with the classical result that a high-tax country benefits from the imposition of a lower tax bound.