Tax Competition, the Distribution of Mne's Ownership and the Wage Formation Process

28 Pages Posted: 30 Jan 2002

See all articles by Marcel Gerard

Marcel Gerard

Facultes Universitaires Catholiques de Mons (FUCAM); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 2002

Abstract

This paper shows how the distribution of the ownership of multinational companies and the labour market conditions, especially the wage formation process, influence the outcome of interjurisdictional tax competition and coordination. In particular, it sets forth that equilibrium corporate tax rate can be negative, being a subsidy to the mobile factor, financed through a tax on the immobile one, and that foreign ownership of companies enables a jurisdiction which behaves non-cooperatively to export its tax burden through a too large tax rate on profits on its territory.

Keywords: Tax Competition, Tax Coordination, Multinational Firm, Foreign Ownership, Labour Market, Wage Formation

JEL Classification: H32, H73, H87

Suggested Citation

Gerard, Marcel, Tax Competition, the Distribution of Mne's Ownership and the Wage Formation Process (January 2002). CESifo Working Paper Series No. 631. Available at SSRN: https://ssrn.com/abstract=297587

Marcel Gerard (Contact Author)

Facultes Universitaires Catholiques de Mons (FUCAM) ( email )

Chaussee de Binche, 151
Mons 7000
Belgium

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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