This paper examines empirically whether governments behave strategically when setting corporate tax rates and tax bases, and – if so – how they react to changes in other countries’ tax rates and bases. Specifically, we estimate the slopes of tax...

The aim of this paper is to make a first step towards studying the role of social expenditure and its interaction with corporate taxation in determining the destination of foreign direct investment (FDI) flows. Using panel data for 18 OECD...

The paper analyzes the effects of a source-based capital income tax on production and market structures, trade and capital flows as well as national and global welfare. The analysis is carried by means of a general equilibrium model of trade which...

This paper argues that the large reduction in corporate tax rates and only gradual widening of tax bases in many countries over the last decades are consistent with tougher international competition for foreign direct investment (FDI). To make this...

It is often feared that tax competition might lead to a race to the bottom. The consequence of a decline of tax rates on capital income would be shrinking capital income tax revenues and difficulties for national governments to perform their usual...