Tax Competition and the Distribution of Income

Traub, Stefan; Yang, Hongyan

doi:10.1111/sjoe.12343

Tax Competition and the Distribution of Income

Publication date

2019

Document type

Research article

Author

Traub, Stefan

Yang, Hongyan

Organisational unit

Volkswirtschaftslehre, insb. Behavioral Economics

DOI

10.1111/sjoe.12343

URI

https://openhsu.ub.hsu-hh.de/handle/10.24405/4425

Publisher

Blackwell

Series or journal

Scandinavian Journal of Economics

ISSN

0347-0520

Part of the university bibliography

✅

Language

English

Keyword

Capital Mobility

Inequality

Tax progression

Abstract

In this paper, we provide a two-country, two-class model of asymmetric capital tax competition. We show formally that poor people living in small countries can benefit from capital tax competition and therefore they are in favor of it. In order to benefit from capital inflow from larger countries, poor people in smaller countries accept less within-country income redistribution. As a consequence, between-country income inequality is increased by tax competition. © The editors of The Scandinavian Journal of Economics 2019.

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