Working Paper
Search Costs and Corporate Income Tax Competition
Kai A. Konrad
CESifo, Munich, 2010
CESifo Working Paper No. 3224
CESifo, Munich, 2010
CESifo Working Paper No. 3224
This paper studies corporate tax competition if it is costly to learn some of the elements that determine the effective tax burden. Search cost may, but need not, eliminate the tax competition pressure. The outcome depends on the boundaries of tax rate and tax base choices. Search cost can explain the empirically observed tax cuts cum base broadening.
CESifo Category
Public Finance
Public Finance
Keywords: costly search, tax competition, corporate taxation, monopoly pricing paradox
JEL Classification: H700,H870