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Evolutionary Tax Competition with Formulary Apportionment

Evolutionary stability is a necessary condition for imitative dynamics of policy learning
and innovation to come to a rest. We apply this concept to profit tax competition
in a regime where a common and consolidated profit tax base for multi-jurisdictional
firms is divided among governments by means of formulary apportionment. In evolutionary
play, governments exhibit aggregate-taking behavior: when comparing
their performance with others, they ignore their impact on the consolidated tax
base. Consequently, evolutionarily stable tax rates are less efficient than tax rates
in best-response tax competition. / Series: WU International Taxation Research Paper Series

Identiferoai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:5899
Date10 1900
CreatorsWagener, Andreas
PublisherWU Vienna University of Economics and Business, Universität Wien
Source SetsWirtschaftsuniversität Wien
LanguageEnglish
Detected LanguageEnglish
TypePaper, NonPeerReviewed
Formatapplication/pdf
Relationhttps://ssrn.com/abstract=3078969, http://epub.wu.ac.at/5899/

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