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Privatization Level, Tax Competition and Public Good
Shih , En-Ming
Ueng, K. L. Glen
|Keywords:||租稅競爭 ; 公共財 ; 民營化 ; 利潤移轉 |
tax competition ; public goods ; privatization ; rent shifting
|Issue Date:||2020-11-11 11:48:15 (UTC+8)|
To study the effect of privatization on tax competition, we set up a two-stage game model. Two exporting country governments decide their domestic capital tax rates to provide public goods on the first stage. And then, two public firms decide their output/price to maximize their profit function based on these tax rates decided by governments. To obtain solutions of subgame-prefect equilibrium, we use the backward method to solve our models. Our research has different results with traditional conclusions in the past. First, the privatization effect will offset (aggravate) the rent shifting effect when the oligopoly competition model is a quantity (price) competition. Particularly, when the level of privatization is lower, the rent-shifting effect do not definitely aggravate (ease) the under-provision of public goods when firms compete in terms of quantity (price). Furthermore, if two governments can cooperate in the capital tax rate, namely the capital tax rate decided by two governments together, the increase in the capital tax rate uncertainly increase the two countries' social welfare. It still exists a situation that the increase in the capital tax may drop down social welfare. That is, the under-provision may be aggravated or eased in both quantity competition model and price competition model.
|Relation:||社會科學論叢, 14(1), 1-28|
|Appears in Collections:||[社會科學論叢] 期刊論文|
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