Implementing Tax Coordination and Harmonization through Voluntary Commitment

Abstract : Pareto-improving tax coordination, and even tax harmonization, are Nash implementable between sovereign countries without any supranational tax authorities. Following Schelling's approach, we consider voluntary commitment, which constrains countries' respective tax rate choices. We develop a commitment game where countries choose their strategy sets in preliminary stages and play consistently during the final one. We determine the set of tax rates, which are implementable by commitment. This allows countries to reach Pareto-improving equilibriums. We also establish that complete tax harmonization may emerge as the subgame perfect Nash equilibrium of the commitment game as long as the asymmetry between countries remains limited. Our analysis contributes to the rationale of tax ranges and, more broadly, of non binding but self-enforcing commitments (not equivalent to cheap talk) in the context of tax competition.
Type de document :
Pré-publication, Document de travail
2016.12. 2016
Liste complète des métadonnées

https://halshs.archives-ouvertes.fr/halshs-01332058
Contributeur : Cerdi Etudes & Documents - Publications <>
Soumis le : mercredi 15 juin 2016 - 10:51:01
Dernière modification le : jeudi 16 juin 2016 - 01:06:06

Fichier

2016.12.pdf
Fichiers produits par l'(les) auteur(s)

Identifiants

  • HAL Id : halshs-01332058, version 1

Collections

Citation

Grégoire Rota-Graziosi. Implementing Tax Coordination and Harmonization through Voluntary Commitment. 2016.12. 2016. <halshs-01332058>

Partager

Métriques

Consultations de
la notice

96

Téléchargements du document

510