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Welfare-improving competition for mobile capital

机译:移动资本的福利提升竞争

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This paper constructs a model in which regions provide firms with a public input, financed by taxes that residents choose to levy on capital and wage income. Self-interested government officials face incentives to provide the public input, because its positive impact on labor and capital productivity leads to larger tax bases. The positive relation between tax revenue and the public input is strengthened if capital is mobile across regions. Government officials engage in "expenditure competition," leaving residents better off than they would be in the absence of capital mobility. To further enhance public sector incentives, residents may choose to tax capital income at a positive rate, although investment is discouraged.
机译:本文构建了一个模型,在该模型中,地区向企业提供公共投入,并由居民选择征收的资本和工资收入征税。自私的政府官员面临提供公共投入的动机,因为它对劳动力和资本生产率的积极影响导致了更大的税基。如果资本可以跨地区流动,那么税收和公众投入之间的正相关关系就会得到加强。政府官员参与“支出竞争”,使居民的生活比没有资本流动的情况更好。为了进一步加强公共部门的激励,尽管不鼓励投资,但居民可以选择对资本收入征税。

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