Can Capital Income Taxes Survive in Open Economies? Export

@article{citeulike:150492, abstract = {Optimal-tax theory forecasts that small open economies should not tax capital income. Yet, countries do tax capital income. Why the inconsistency? This paper shows that use of the double-taxation convention, whereby governments credit taxes paid abroad against domestic taxes, helps explain this inconsistency. In particular, capital income will be taxed if a dominant capital exporter acts as a Stackelberg leader when setting its tax policy. Due to the convention, other countries will then tax capital imports, making it attractive for the dominant capital exporter to tax capital income. Without a dominant capital exporter, however, the model still forecasts no capital-income taxes.}, author = {Gordon, Roger H.}, citeulike-article-id = {150492}, citeulike-linkout-0 = {http://www.jstor.org/stable/2328981}, journal = {The Journal of Finance}, keywords = {aarpubec, public\_economics, taxation}, number = {3}, pages = {1159--1180}, posted-at = {2005-04-06 20:19:44}, priority = {2}, title = {Can Capital Income Taxes Survive in Open Economies?}, url = {http://www.jstor.org/stable/2328981}, volume = {47}, year = {1992} }

TY - JOUR ID - citeulike:150492 L3 - citeulike-article-id:150492 N2 - Optimal-tax theory forecasts that small open economies should not tax capital income. Yet, countries do tax capital income. Why the inconsistency? This paper shows that use of the double-taxation convention, whereby governments credit taxes paid abroad against domestic taxes, helps explain this inconsistency. In particular, capital income will be taxed if a dominant capital exporter acts as a Stackelberg leader when setting its tax policy. Due to the convention, other countries will then tax capital imports, making it attractive for the dominant capital exporter to tax capital income. Without a dominant capital exporter, however, the model still forecasts no capital-income taxes. IS - 3 JF - The Journal of Finance EP - 1180 TI - Can Capital Income Taxes Survive in Open Economies? VL - 47 SP - 1159 KW - aarpubec KW - public_economics KW - taxation AU - Gordon, Roger PY - 1992/// UR - http://www.jstor.org/stable/2328981 ER -