Institutional quality and capital taxation

Resumo

We describe the preferred taxation regime in a small economy with uncertain institutional quality. We obtain that a preferential taxation regime in which taxes can be matched to the mobility of the tax base may be worse off than a non-preferential taxation regime in which taxes are constant across bases with distinct mobility. Since the small economy takes foreign taxes as given, our result is not driven by a downward pressure on revenues caused by unconstrained tax competition. It is instead related to the ability of a non-preferential taxation regime to credibly convey information about the institutional quality of the small economy. We present some empirical evidence which corroborates our results.

Ficha do documento

Tipo

Artigo científico

Ano

2016

Instituição

Springer

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

DOI

10.1007/s10797-014-9346-8

Identificador

oai:repositorio.fgv.br:10438/23561

Temas

Economia

Palavras-chave

Non-preferential taxationAsymmetric informationPoor institutional qualityForeign direct-investmentEconomiaInvestimentos