TY - JOUR
T1 - Tax competition and migration
T2 - The race-to-the-bottom hypothesis revisited
AU - Razin, Assaf
AU - Sadka, Efraim
PY - 2012/3
Y1 - 2012/3
N2 - Oates reminds us that tax competition among localities in the presence of capital mobility, may lead to inefficiently low tax rates (and benefits). In contrast, the Tiebout paradigm suggests that tax competition yields an efficient outcome, so that there are no gains from tax coordination. This article demonstrates that when a group of host countries faces an upward supply of migrants, labor and capital income tax rate under competition are higher than under tax coordination, due to a fiscal externality.
AB - Oates reminds us that tax competition among localities in the presence of capital mobility, may lead to inefficiently low tax rates (and benefits). In contrast, the Tiebout paradigm suggests that tax competition yields an efficient outcome, so that there are no gains from tax coordination. This article demonstrates that when a group of host countries faces an upward supply of migrants, labor and capital income tax rate under competition are higher than under tax coordination, due to a fiscal externality.
KW - Fiscal policy
KW - Government expenditures and welfare programs
KW - International migration
KW - Public finance
KW - Taxation
UR - http://www.scopus.com/inward/record.url?scp=84857675851&partnerID=8YFLogxK
U2 - 10.1093/cesifo/ifr029
DO - 10.1093/cesifo/ifr029
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AN - SCOPUS:84857675851
SN - 1610-241X
VL - 58
SP - 164
EP - 180
JO - CESifo Economic Studies
JF - CESifo Economic Studies
IS - 1
M1 - ifr029
ER -