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http://hdl.handle.net/10419/30143
  
Title:Asymmetric tax competition with formula apportionment PDF Logo
Authors:Wrede, Matthias
Issue Date:2009
Series/Report no.:Joint discussion paper series in economics 2009,43
Abstract:This paper analyzes asymmetric tax competition under formula apportionment. It sets up a model with multinationals where two welfare-maximizing jurisdictions of different size levy source-based corporate taxes and allocate taxes using the formula approach. At the Nash equilibrium, tax rates are too low and public goods quantities are to small. The paper shows that the larger country levies a larger tax rate compared to the smaller country as it does under separate accounting. Citizens of the larger country are worse off than those of the smaller country.
Subjects:Multinational enterprises
corporate taxation
formula apportionment
asymmetric tax competition
JEL:H25
H42
H73
Document Type:Working Paper
Appears in Collections:MAGKS Joint Discussion Paper Series in Economics, Universität Marburg

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