Capital Mobility, Distributive Conflict, and International Tax Coordination
21 Pages Posted: 30 Apr 2000 Last revised: 12 Oct 2010
Date Written: June 1999
Basic economic theory identifies a number of efficiency gains that derive from international capital mobility. But just as free trade in goods, there is no guarantee that capital mobility makes everyone better off. Consequently, capital mobility may be politically unsustainable even though it enhances efficiency. This paper discusses how such a dilemma might arise, and suggests that international tax coordination might serve as a way out under some circumstances.
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