摘要:
This thesis investigates the effects of pressures brought by increasing capital mobility and interjurisdictional fiscal competition to fiscal policy, focusing particularly on the European Union and the analysis of policy reforms that can be adopted in such contexts. Firstly, the relationship between tax competition and economic growth is re-assessed. In a race to attract mobile capital, jurisdictions compete to offer the highest after-tax rates of return. Governments are driven into the provision of higher levels of productive public goods, and shift their tax structures, towards the taxation of the least mobile factors or least distortive tax bases. In an environment of fixed labour supply, this implies a race to the bottom in capital taxes and a race to the top in the taxes falling on labour. Taking into account the potential effects of fiscal competition on fiscal policy, the consequences of different tax harmonization scenarios are also analyzed. The harmonization of capital taxes leads to a race to the top in taxes on immobile factors. Once tax rates on mobile factors are fixed, tax competition shifts towards immobile factors. This implies that the tax burden falls again disproportionately on labour. Only the harmonization of labour income taxes can avoid this outcome, while leaving room for positive capital income taxes. Secondly, extending this argument within a more detailed model of labour supply calibrated to the EU economy, more detailed policy proposals for a European-wide fiscal harmonization agreement are studied. Labour income and consumption tax harmonization yield potentially better results than capital tax harmonization, as the main fiscal competition-driven government investment distortion, resulting in the over-investment on productive public goods at the expense of merit goods, is minimized. In particular, policy simulation results suggest that indirect taxes, such as value-added taxes, should become a priority instrument for European-wide fisca