Residence-Based Capital Taxation: Why Information is Voluntarily Exchanged and Why it is Not

28 Pages Posted: 15 Mar 2001

See all articles by Wolfgang Eggert

Wolfgang Eggert

University of Freiburg - Institute of Public Finance; CESifo (Center for Economic Studies and Ifo Institute)

Martin Kolmar

University of St. Gallen - Institute of Economy and the Environment (IWOe-HSG); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 2000

Abstract

The issue of capital tax competition in source-based capital taxes is viewed to be unproblematic if residence-based capital taxation exists. The sustainability, however, of residence-based capital taxation depends on the co-operation of source countries to assist in collecting tax revenues that benefit the residence country. We analyze conditions under which information about foreign savings are voluntarily exchanged. It turns out that information is voulntarily exchanged if the wage structure of the economy is not influenced by the size of the financial sector resulting in an efficient allocation with decentralized tax policies. In contrast, strategic incentives to withhold information may exist if the size of the financial sector has a positive impact on the wage structure of an economy.

JEL Classification: F42, F20, H21

Suggested Citation

Eggert, Wolfgang and Kolmar, Martin, Residence-Based Capital Taxation: Why Information is Voluntarily Exchanged and Why it is Not (December 2000). Available at SSRN: https://ssrn.com/abstract=260750 or http://dx.doi.org/10.2139/ssrn.260750

Wolfgang Eggert (Contact Author)

University of Freiburg - Institute of Public Finance ( email )

D-79098 Freiburg
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Martin Kolmar

University of St. Gallen - Institute of Economy and the Environment (IWOe-HSG) ( email )

Varnbüelstrasse 14
CH-9000 St. Gallen
Switzerland
+41 (0)71 224 25 35 (Phone)
+41 (0)71 224 23 02 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
108
Abstract Views
1,260
rank
322,738
PlumX Metrics