Pareto-Improving Minimum Corporate Taxation
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Summary:
The recent international agreement on a minimum effective corporate tax rate marks a profound change in global tax arrangements. The appropriate level of that minimum, however, has been, and remains, extremely contentious. This paper explores the strategic responses to a minimum tax, which—the policy objective being to change the rules of tax competition game--—are critical for assessing the design and welfare impact of, and prospects for, this fundamental policy innovation. Analysis and calibration plausibly suggest sizable scope for minima that are Pareto-improving, benefiting low as well as high tax countries, over the uncoordinated equilibrium.
Series:
Working Paper No. 2021/250
Subject:
Competition Corporate income tax Expenditure Financial markets Revenue administration Tax avoidance Taxes
Frequency:
regular
English
Publication Date:
October 22, 2021
ISBN/ISSN:
9781557756183/1018-5941
Stock No:
WPIEA2021250
Pages:
23
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