Optimal Fiscal Policy in an Open Economy with Capital Income Shifting and Consumer Cross-border Purchases

• Autorzy: Janusz Kudła , Agata Kocia , Katarzyna Kopczewska , Robert Kruszewski , Konrad Walczyk
• Języki publikacji: EN

Abstrakty

EN

The paper presents a fiscal policy model integrating tax avoidance, the complexity of tax systems and the fiscal solvency hypothesis within the traditional framework of tax competition. Furthermore, we take into account: taxation of consumption, possibility of capital income shifting and foreign goods purchases (untaxed in the destination country). We conclude that if fiscal policy is by no means unfettered the equilibrium can be allocation efficient, provided that the marginal rate of substitution between private and public goods is one. The changes in public debt affect tax rates in equilibrium differently: positively for the consumption tax rate and negatively for the labor tax rate. The change of the capital tax depends on the level of economic internalization. This approach is especially useful during a solvency crisis and can be applied to predict tax rates' adjustment when the bonds issuance decreases or public debt accelerates. (original abstract)

Słowa kluczowe

EN

Fiscal policy; Taxes; Taxation; Public debt; Tax competition; Marginal rate of substitution

PL

Polityka fiskalna; Podatki; Opodatkowanie; Dług publiczny; Konkurencyjność podatkowa; Krańcowa stopa substytucji

• Czasopismo: Equilibrium
• Rocznik: 2015
• Tom: 10
• Numer: nr 2
• Strony: 9--30

Twórcy

autor

Janusz Kudła

• University of Warsaw, Poland

autor

Agata Kocia

• University of Warsaw, Poland

autor

Katarzyna Kopczewska

• University of Warsaw, Poland

autor

Robert Kruszewski

• Warsaw School of Economics, Poland

autor

Konrad Walczyk

• Warsaw School of Economics, Poland

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Identyfikatory

DOI

10.12775/ EQUIL.2015.011