International Tax and Public Finance

, Volume 15, Issue 6, pp 637–646 | Cite as

Efficiency of capital taxation in an open economy: tax competition versus tax exportation

Open Access
Article

Abstract

Tax competition and tax exportation have contrary implications for the efficiency of capital taxation. We provide a simple condition for the dominance of either force, which depends on the mobility of foreign investment. We use this condition to evaluate the relative importance of both forces in the US and in the EU.

Keywords

Tax competition Tax exportation Foreign ownership Capital mobility 

JEL Classification

F2 H12 

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Copyright information

© The Author(s) 2008

Authors and Affiliations

  1. 1.CentER, TILEC and Department of EconomicsTilburg UniversityTilburgThe Netherlands
  2. 2.CentER and Department of EconomicsTilburg UniversityTilburgThe Netherlands

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