The purpose of this study is to examine the social welfare implications of international tax competition. Using the Harberger Model and the Laffer Curve, it was hypothesized that if the rate fall below a certain revenue maximizing point, then competition will have a negative effect on the welfare of the individual by either higher personal income tax rates or a decrease in public social spending. Using a modification of Jan K. Brueckner's reaction function, 29 of the OECD countries were tested using panel data dating from 1990 to 2007. The results suggest that tax competition has a significant impact on social welfare; however, the results also indicate that countries are still operating above the maximum revenue point. If tax competition continues at the same pace, then social welfare could negatively be affected.
Jenkins, Kelsey, "Social Welfare Implications of International Tax Competition in the OECD Countries" (2012). Senior Independent Study Theses. Paper 765.
Bachelor of Arts
Senior Independent Study Thesis
© Copyright 2012 Kelsey Jenkins