Work detail

Tax Competition and Economic Growth

Author: Bc. Dalibor Roháč
Year: 2005 - summer
Leaders: doc. Ing. Ondřej Schneider MPhil., Ph.D.
Work type: Bachelors
Language: English
Pages: 76
Awards and prizes: B.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance and for an extraordinarily good bachelors diploma thesis
Abstract: This paper deals with the relationship between tax competition and economic growth. After proposing a very general and theoretical discussion of the nature of taxation, we review the introduction of taxation into various models of economic growth, both exogenous and endogenous. In the simplest version of endogenous growth models we show how taxation affects growth rates. We examine the results of different empirical studies and simulations and compare effects of various modes of taxation. We study various arguments addressed in favour and against tax competition. We pay attention to definitional matters of tax rates and bases, reviews empirical evidence concerning development of corporate taxes in the EU and the OECD countries over the last decades and investigate whether anything suggests that there has been interdependence in corporate tax rate setting across countries. Furthermore, we recapitulate effort
done by both the OECD and the EU to stop tax competition. Finally, we argue that tax competition is not harmful and that it emerges as a means of constraining governments
to discipline.
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