Dynamic inconsistency and preferential taxation of foreign capital
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Date
Authors
Kishore, Kaushal
Journal Title
Journal ISSN
Volume Title
Publisher
Springer
Abstract
In a two-period dynamic model in which a single country attempts to attract two large investors endowed with capital with varying rate of returns, we show that the result of Kishore and Roy (Econ Lett 124:88–92, 2014) that a country has incentives to commit to a non-preferential regime to circumvent a dynamic inconsistency problem does not hold. The tax revenue of the government may be higher under a preferential regime compared to a non-preferential regime.
Description
Keywords
Tax competition, Non-preferential regime, Preferential regime, Dynamic inconsistency
Sustainable Development Goals
Citation
Kishore, K. Dynamic inconsistency and preferential taxation of foreign capital. International Tax and Public Finance (2017) 24: 381-396. doi:10.1007/s10797-016-9423-2