Redistributive Income Taxation under Outsourcing and Foreign Direct Investment

14 Pages Posted: 20 May 2010

See all articles by Thomas Aronsson

Thomas Aronsson

University of Umea - Department of Economics; Uppsala University

Erkki Koskela

University of Helsinki - Department of Political and Economic Studies; CESifo (Center for Economic Studies and Ifo Institute); Bank of Finland - Research Department; IZA Institute of Labor Economics

Date Written: May 2010

Abstract

This paper deals with optimal income taxation under labor outsourcing and FDI. We show how the optimal income tax response to the joint effect of outsourcing and FDI depends on whether FDI is complementary with, or substitutable for, domestic labor.

Keywords: outsourcing, foreign direct investment, optimal nonlinear taxation

JEL Classification: D60, H21, H23, H25, J31

Suggested Citation

Aronsson, Thomas and Koskela, Erkki, Redistributive Income Taxation under Outsourcing and Foreign Direct Investment (May 2010). CESifo Working Paper Series No. 3051. Available at SSRN: https://ssrn.com/abstract=1610088

Thomas Aronsson (Contact Author)

University of Umea - Department of Economics ( email )

UmeƄ University
Umea, SE - 90187
Sweden

Uppsala University

Box 513
Uppsala, 751 20
Sweden

Erkki Koskela

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland
+358 9 191 8894 (Phone)
+358 9 191 8877 (Fax)

HOME PAGE: http://www.cesifo.de/servlet/page?_pageid=56&_dad=portal30&_schema=PORTAL30&pa_id=7298

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Bank of Finland - Research Department ( email )

P.O. Box 160
FIN-00101 Helsinki
Finland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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