Paternalism and tax competition

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dc.contributor.author Kotakorpi, Kaisa -
dc.date.accessioned 2012-06-17T20:09:04Z
dc.date.available 2012-06-16 08:41:34 -
dc.date.available 2012-06-17T20:09:04Z
dc.date.issued 2007 -
dc.identifier.isbn 978-951-44-6879-7 -
dc.identifier.issn 1458-1191 -
dc.identifier.uri http://tampub.uta.fi/handle/10024/65499
dc.description.abstract When consumers make mistakes, the government may wish to use paternalistic taxation as a corrective measure. We examine a country whose government attempts to use taxation to reduce the consumption of a harmful good, and analyse the extent to which cross-border shopping and tax competition undermine the feasibility of paternalistic taxation. We show that the paternalistic component of a tax on a harmful good is reduced due to the possibility of cross-border shopping, but it does not disappear altogether. In a model with tax competition between two countries, only one of which has a paternalistic objective, we show that there exists an asymmetric Nash equilibrium, where the paternalistic country has the higher tax rate on the harmful good. We further show that despite the divergence in policy objectives, a minimum tax rate requirement can be Pareto improving. Tax harmonisation on the other hand always reduces welfare in the low-tax country. -
dc.format.extent 25 -
dc.language.iso en -
dc.title Paternalism and tax competition -
dc.type fi=Erillisteos | en=Monograph| -
dc.identifier.urn urn:isbn:978-951-44-6879-7 -
dc.type.version fi=Kustantajan versio | en=Publisher's version| -
dc.subject.okm fi=Kansantaloustiede | en=Economics| -
dc.oldstats 490 -
dc.seriesname.electronic Tampere Economic Working Papers Net Series
dc.relation.numberinserieselectronic 52/2007

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