Abstract

https://ssrn.com/abstract=2328479
 


 



The Internet as a Tax Haven? The Effect of the Internet on Tax Competition


David R. Agrawal


University of Kentucky - James W. Martin School of Public Policy and Administration; University of Kentucky - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

February 1, 2017


Abstract:     
High Internet penetration puts downward pressure on tax rates as jurisdictions seek to reduce revenue leakage to tax-free sales; but, taxable online sales will put upward pressure on tax rates because the Internet facilitates tax collection. I find that an increase in Internet penetration induces municipalities on the low-state-tax side of state borders to lower their local tax rates by more than municipalities on the high-state-tax side. A one standard deviation increase in Internet penetration in large municipalities lowers local sales taxes by 0.15 percentage points more in low-tax states.

Number of Pages in PDF File: 80

Keywords: Commodity Taxation, Fiscal Competition, e-Commerce, Tax Havens, Tax Evasion

JEL Classification: H25, H71, H73, L81, R50


Open PDF in Browser Download This Paper

Date posted: September 21, 2013 ; Last revised: February 17, 2017

Suggested Citation

Agrawal, David R., The Internet as a Tax Haven? The Effect of the Internet on Tax Competition (February 1, 2017). Available at SSRN: https://ssrn.com/abstract=2328479 or http://dx.doi.org/10.2139/ssrn.2328479

Contact Information

David Robert Agrawal (Contact Author)
University of Kentucky - James W. Martin School of Public Policy and Administration ( email )
433 Patterson Office Tower
Lexington, KY 40506-0027
United States
859-257-8608 (Phone)
HOME PAGE: http://www.uky.edu/~drag222/
University of Kentucky - Department of Economics ( email )
Lexington, KY 40506
United States
HOME PAGE: http://www.uky.edu/~drag222/
CESifo (Center for Economic Studies and Ifo Institute) ( email )
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.uky.edu/~drag222/

Feedback to SSRN


Paper statistics
Abstract Views: 2,564
Downloads: 624
Download Rank: 32,127