Tax competition and parasitic tax havens
By: Joel Slemrod, John D. Wilson
Contributors: Wilson, John D.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 12225; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12225.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "We develop a tax competition framework in which some jurisdictions, called tax havens, are parasitic on the revenues of other countries.  The havens use real resources to help companies camouflage their home-country tax avoidance, and countries use resources in an attempt to limit the transfer of tax revenues to the havens.  The equilibrium price for this service depends on the demand and supply for such protection.  Recognizing that taxes on wage income are also evaded, we solve for the equilibrium tax rates on mobile capital and immobile labor, and we demonstrate that the full or partial elimination of tax havens would improve welfare in non-haven countries, in part because countries would be induced to increase their tax rates, which they have set at inefficiently low levels in an attempt to attract mobile capital.  We also demonstrate that the smaller countries choose to become tax havens, and we show that the abolishment of a sufficiently small number of the relatively large havens leaves all countries better off, including the remaining havens"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/24/2006.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.