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Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data

International Tax and Public Finance volume 12, pages 667–687 (2005)Cite this article

Abstract

The theory of international tax competition suggests a shift of tax burden from mobile to immobile tax bases, especially for small open economies. This paper assesses these hypotheses empirically using a sample of 23 OECD countries and the time period 1965–2000. In accordance with tax competition theory, we find that capital mobility exerts a negative impact on capital tax burden, and a positive one on labor tax burden. Further, we observe a positive effect of country size, suggesting that small open economies are levying lower capital and labor taxes than larger ones. Finally, we analyze the time pattern of tax competition and demonstrate that tax competition has intensified since the mid 1980’s.

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Authors and Affiliations

  1. Department of Economics and Statistics, University of Innsbruck, Universitaetsstrasse 15, A-6020, Innsbruck, Austria

    Hannes Winner

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  1. Hannes Winner
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Correspondence to Hannes Winner.

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JEL Code: H7, H87, C23

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Winner, H. Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data. Int Tax Public Finan 12, 667–687 (2005). https://doi.org/10.1007/s10797-005-2915-0

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  • DOI: https://doi.org/10.1007/s10797-005-2915-0

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