Search Costs and Corporate Income Tax Competition

13 Pages Posted: 29 Oct 2010  

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Social Science Research Center Berlin (WZB); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

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Date Written: October 27, 2010

Abstract

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.

Keywords: costly search, tax competition, corporate taxation, monopoly pricing paradox

JEL Classification: H70, H87

Suggested Citation

Konrad, Kai A., Search Costs and Corporate Income Tax Competition (October 27, 2010). CESifo Working Paper Series No. 3224. Available at SSRN: https://ssrn.com/abstract=1698667

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

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Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Social Science Research Center Berlin (WZB) ( email )

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Berlin, 10785
Germany

HOME PAGE: http://www.wzb.eu/mp/fff/people/kai_konrad.en.htm

Centre for Economic Policy Research (CEPR)

90-98 Goswell Road
London, EC1V 7RR
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

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