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Harmonization of Corporate Tax Systems and Its Effect on Collusive Behavior
Author(s) -
SCHINDLER DIRK,
SCHJELDERUP GUTTORM
Publication year - 2009
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2009.01422.x
Subject(s) - harmonization , economics , corporate tax , international economics , indirect tax , tax harmonization , monetary economics , value added tax , tax avoidance , tax reform , public economics , tax competition , physics , acoustics
We study how harmonization of corporate tax systems affects the stability of international cartels. We show that tax base harmonization reinforces collusive agreements, while harmonization of corporate tax rates may destabilize or stabilize cartels. We also find that bilateral and full harmonization to a common standard is worse from society's point of view than unilateral harmonization to a minimum tax standard.