Coordination of capital taxation among asymmetric countries

Susana Peralta, Tanguy van Ypersele

Research output: Contribution to journalArticlepeer-review

23 Citations (Scopus)


This paper studies international fiscal coordination in a world of integrated markets and sovereign national governments. Mobile capital and immobile labor are taxed in order to finance a fixed budget. This generates productive inefficiency. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. It is shown that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound (i.e., a tax range) which is unanimously accepted.

Original languageEnglish
Pages (from-to)708-726
Number of pages19
JournalRegional Science and Urban Economics
Issue number6
Publication statusPublished - Nov 2006


  • Capital mobility
  • Tax competition
  • Tax coordination


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