The Resource Taxing multi-nationals under union wage bargaining

Taxing multi-nationals under union wage bargaining

Label
Taxing multi-nationals under union wage bargaining
Title
Taxing multi-nationals under union wage bargaining
Creator
Subject
Language
eng
Summary
This paper investigates corporate taxation under separate accounting (SA) and formula apportionment (FA) in a model with union wage bargaining and multi-national firms. Under SA, the author finds that increases in the corporate tax rate raise the wage level of domestic workers, while they lower the remuneration of foreign workers. The main insight emerging from a tax competition game is that the endogenous wage level gives rise to an ambiguous fiscal externality, which may dampen the race-to-the-bottom in corporate tax rates. A switch to a tax system with FA principles reverses the impact of corporate taxes on negotiated wages. While increases in the corporate tax rate reduce domestic wages, they raise the wage level of foreign workers. In a tax competition game, the endogenous wage level gives rise to a positive fiscal externality that enforces the race-to-the-bottom in corporate tax rates
Citation source
In: International tax and public finance. - Norwell. - Vol. 18 (2011),
http://library.link/vocab/creatorName
Riedel, N
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • corporate income tax
  • remuneration
  • MNE
  • separate entity accounting method
  • formulary apportionment
  • tax competition
Label
Taxing multi-nationals under union wage bargaining
Instantiates
Publication
Label
Taxing multi-nationals under union wage bargaining
Publication

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