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.

Additional Metadata
Keywords Corporate tax systems, tacit collusion
JEL International Fiscal Issues; International Public Goods (jel H87), Market Structure, Firm Strategy, and Market Performance (jel L1)
Persistent URL hdl.handle.net/1765/124531
Journal Journal of Public Economic Theory
Citation
Schindler, D.S., & Schjelderup, G. (2009). Harmonization of Corporate Tax Systems and Its Effect on Collusive Behavior. Journal of Public Economic Theory, 11(4), 599–621. Retrieved from http://hdl.handle.net/1765/124531