Mara (Nandra), Eugenia Ramona (2007): Tax Competition in the European Union – Evidence from Panel Data. Published in: MIBES 2007 (2007)
Download (120kB) | Preview
After the last EU enlargement the problem of tax competition is more complex and this article tries to reflect the amplitude of this phenomenon. Some factors have a positive influence of tax competition and one of this is capital mobility, but others have a negative impact like public debt or budget deficit. Using a panel data for EU countries, analyzed on 1995-2004, we find significant correlations between the implicit tax rate of business income and corporation profits and the budget deficit, public debt, GDP per capita and the degree of openness of countries, the last variable is used as a proxy for capital mobility. The tax competition is specific only for direct taxation and for this reason we choose as dependent variables an indicator which is reflecting the effective tax burden on business income and corporations profits - the implicit tax rate of business income and corporations profits. The main conclusion is that every EU member states have a different degree of tax competition and this degree is limited by the EU requires concerning the budget deficit which have not exceed 3% of GDP and 60% for public debt.
|Item Type:||MPRA Paper|
|Original Title:||Tax Competition in the European Union – Evidence from Panel Data|
|English Title:||Tax Competition in the European Union – Evidence from Panel Data|
|Keywords:||tax competition, panel analysis, harmonization, tax burden|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy|
|Depositing User:||Eugenia Ramona Mara|
|Date Deposited:||04. Mar 2010 14:29|
|Last Modified:||31. Dec 2015 00:52|
Andersson F., and R. Forslid, 2003, “Tax Competition and Economic Geography”, Forthcoming, Journal of Public Economic Theory.
Baldwin, R, R. Forslid, P. Martin, G. Ottaviano and F. Robert-Nicoud, 2003, “Economic Geography and Public Policy”, Forthcoming, Princeton University Press.
Boss, Alfred, 1999, "Do We Need Tax Harmonization in the EU?" Kiel Institute Working Paper No. 916.
Brennan, G., and J. Buchanan, 1980, "The Power to Tax: Analytical Foundations of a Fiscal Constitution”, Cambridge University Press.
Halkos, G.E., and N.C., Kyriazis, 2006, “Is tax competition harmful and is the EU an optimal tax area?”, Journal Law and Economics, 21:p. 163-177, Springer Science & Business Media.
Krogstrup, S., 2003, "A Synthesis of Recent Developments in the Theory of Capital Tax Competition," EPRU Working Paper.