Tax harmonisation in Europe: Moving forward

Agnès Benassy-Quéré, Alain Trannoy, Guntram Wolff 22 July 2014

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The issue of tax harmonisation has been repeatedly debated in the EU since the European Economic Community was established. Substantial tax harmonisation exists in the area of indirect taxation, and proposals regarding corporations are on the table, such as the project of Common Consolidated Corporate Income Tax (CCCTB, see European Commission 2011a). According to widely accepted economic theory (Zodrow and Mieszkowski 1986), tax harmonisation is a way to curb tax competition that leads to either the under-provision of public goods or to burden-shifting from mobile to immobile tax bases.

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Topics:  EU policies Financial markets Taxation

Tags:  EU, tax, multinationals, tax competition, tax avoidance, banking union, tax harmonisation, corporation tax, Tiebout competition, financial activity tax

Migration and wage effects of taxing top earners: Evidence from the foreigners' tax scheme in Denmark

Henrik Kleven, Camille Landais, Emmanuel Saez, Esben Schultz 17 September 2013

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Tax-induced international mobility of talent is a controversial public-policy issue, especially when tax rates differ substantially across countries and migration barriers are low as in the case of the EU. High top-tax rates may induce top earners to migrate to countries where the tax burden is lower, thereby limiting the redistributive power of governments and potentially creating harmful tax competition.

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Topics:  Migration Taxation

Tags:  EU, tax competition, migration

Revisiting the debate on tax competition vs. tax coordination

Assaf Razin, Efraim Sadka 21 January 2011

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In 1992, the EU established a single market for capital and labour. While the benefits are often lauded, the worry ever since has been that, in the absence of a fully-fledged harmonisation of the income tax system, tax competition among member countries might undermine the welfare state.

Referring to tax competition among localities in the presence of capital mobility, Oates (1972, p.143) argues that competition may lead to inefficiently low tax rates (and benefits):

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Topics:  Global governance Taxation

Tags:  tax competition, tax coordination

Tax competition tames big government

Marius Brülhart, Mario Jametti 02 November 2007

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Is tax competition good or bad for the well-being of society?

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Topics:  Taxation

Tags:  tax, tax competition

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