This article studies the effects of tax competition on the provision of public goods under business risk and partial irreversibility of investment. As will be shown, the provision of public goods changes over time and also depends on the business cycle. In particular, under source-based taxation, public goods can be optimally provided during a downturn, in the short term. The converse is true during a recovery, when they are underprovided. In the long term however, tax competition does not affect capital accumulation and therefore, the provision of public goods.

Tax Competition, Investment Irreversibility and the Provision of Public Goods. CESifo Working Paper No. 4256

PANTEGHINI, Paolo;VERGALLI, Sergio
2013-01-01

Abstract

This article studies the effects of tax competition on the provision of public goods under business risk and partial irreversibility of investment. As will be shown, the provision of public goods changes over time and also depends on the business cycle. In particular, under source-based taxation, public goods can be optimally provided during a downturn, in the short term. The converse is true during a recovery, when they are underprovided. In the long term however, tax competition does not affect capital accumulation and therefore, the provision of public goods.
2013
File in questo prodotto:
File Dimensione Formato  
cesifo1_wp4256Moretto_Panteghini_Vergalli.pdf

accesso aperto

Tipologia: Full Text
Licenza: PUBBLICO - Pubblico senza Copyright
Dimensione 234.29 kB
Formato Adobe PDF
234.29 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11379/452715
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact