Tax Competition in Wilhelmine Germany and Its Implications for the European Union

1996 ◽  
Vol 48 (3) ◽  
pp. 324-357 ◽  
Author(s):  
Mark Hallerberg
Keyword(s):  
European Union ◽  
Tax Competition ◽  
Tax Policy ◽  
National Government ◽  
Common Denominator ◽  
Tax Rates ◽  
The European Union ◽  
Political Systems ◽  
Data Set ◽  
State Tax

The twenty-five German states from 1871 to 1914 present a useful data set for examining how increasing economic integration affects tax policy. After German unification the national government collapsed six currencies into one and liberalized preexisting restrictions on capital and labor mobility. In contrast, the empire did not directly interfere in the making of state tax policy; while states transferred certain indirect taxes to the central government, they maintained their own autonomous tax and political systems through World War I. This paper examines the extent to which tax competition forced the individual state tax systems to converge from 1871 to 1914. In spite of a diversity of political systems, tax competition did require states to harmonize their rates on mobile factors like capital and high income labor, but it did not affect tax rates on immobile factors. In states where the political system guaranteed agricultural dominance, taxes on land were reduced, while in states with more open systems, tax rates remained higher. One unexpected result is that tax rates on capital and income converged upward instead of downward. The most dominant state, Prussia, served as the lowest-common-denominator state, but pressure from the national government, especially to increase expenditures, forced all states to raise their tax rates. These results suggest possible ways for the European Union to avoid a forced downward convergence of member state tax rates on capital and mobile labor.

scholarly journals Are the tendencies of the race to the bottom real in the European Union?

2013 ◽  
Vol 61 (4) ◽  
pp. 893-898
Author(s):  
Veronika Dvořáková
Keyword(s):  
European Union ◽  
Tax Competition ◽  
Debt Crisis ◽  
Panel Analysis ◽  
Tax Rates ◽  
The European Union ◽  
Effective Tax Rates ◽  
Race To The Bottom ◽  
Member States ◽  
The Eu

The increasing globalization and integration of markets are one of the causes of tax competition. Even though tax competition may be beneficial for some countries, on the other hand for others states it may mean an erosion of their public budgets. The Member States are therefore forced to compete for a capital by a reducing of the tax burden (especially a cutting of the corporate effective tax rates) to don’t lose their tax bases. At present time of the debt crisis, when most of the Member States look for a solution to a balance of their deficit budgets, there a question arises whether a tendency towards a cutting of corporate effective tax rates does not lead to a race to the bottom and the erosion of their public budgets. In this context, the aim of this paper is to answer whether the race to the bottom is real in the European Union. This paper empirically evaluates the level of the race to the bottom in the European Union and using panel analysis it verifies on a sample of 27 Member States over the period 1998 to 2010 whether the tendencies of the race to the bottom are real. According to the panel analysis this paper concludes that the tendencies of the race to the bottom are particularly evident in the new Member States, i.e. in the EU-12 countries, while for the old Member States, i.e. for the EU-15 countries, the race to the bottom cannot be statistically confirmed.

scholarly journals Tax competition and tax harmonization in the European Union

2004 ◽  
Vol 52 (6) ◽  
pp. 135-144 ◽  
Author(s):  
Danuše Nerudová
Keyword(s):  
European Union ◽  
Tax Competition ◽  
Tax Rates ◽  
The European Union ◽  
Indirect Taxation ◽  
Tax Base ◽  
Direct Taxation ◽  
Administrative Costs ◽  
Tax Harmonization

The article deals with the problems of tax competition and harmonization within the European Union. It reveals the single difficulties connected with harmonization, identifies the problems arising from tax competition and points out the harmful tax competition as well. Single compulsory harmonized tax base in connection with prevailing tax competition in the area of tax rates is the suggested solution in the scope of direct taxation. As the solution in the area of indirect taxation could serve the introduction of “principle of origin”. This would cause remarkable administrative costs decrease not only for economic subjects but for tax authorities as well.

Deshadowing the Economy as the Vector to Ensure Effective State Tax Policy

2020 ◽  
pp. 132-140
Author(s):  
Anzhela Ya. Kuznetsova ◽  
Yuliia G. Humenna
Keyword(s):  
Tax Policy ◽  
Shadow Economy ◽  
Correlation Coefficients ◽  
Tax Rates ◽  
The European Union ◽  
Tax Rate ◽  
Tax Revenues ◽  
State Tax ◽  
Key Indicators

The article is devoted to the study of the interconnection of tax policy indicators and the shadow economy in the complex interaction in the context of the country’s competitive tax system. Key indicators of tax policy implementation (total tax and contribution rates, number of taxes, time to administer taxes by economic entities) of Ukraine are compared with the countries of the European Union. The paper uses empirical correlation coefficients to determine the relationship between tax rates, tax revenues, and the level of economy shadowing, both for the Ukrainian economy and internationally. The dual role of the shadow economy in the use of the Laffer concept is substantiated. The key directions of the deshadowing policy of the economy of the country are identified. It will help to balance and increase the efficiency of the implementation of the mechanisms of taxation of economic entities. Keywords: shadowing of the economy; tax policy; tax rate; tax revenues; tax burden; Laffer concept.

Is Eastern Europe to Blame for Falling Corporate Taxes in Europe?

2016 ◽  
Vol 30 (4) ◽  
pp. 855-884 ◽  
Author(s):  
Carissa L. Tudor ◽  
Hilary Appel
Keyword(s):  
Eastern Europe ◽  
Tax Competition ◽  
Tax Rates ◽  
The European Union ◽  
Corporate Tax ◽  
Data Set ◽  
Potential Efficacy ◽  
Corporate Tax Rates ◽  
Eastern European Countries ◽  
The Eu

When a dozen new countries joined the European Union in the mid-2000s, political tensions spiked over disparities in corporate income tax rates. Since the time of enlargement, leaders have tried repeatedly to enhance corporate tax coordination within the EU, as a result of fears of downward pressure on corporate tax rates and states’ weakening ability to collect revenues. At the same time, leaders from new member states in Eastern Europe with low corporate tax rates have contended that regional efforts to coordinate tax policies are not worthwhile, given that corporate tax competition is a global phenomenon. This article argues that corporate tax competition is more acute at the regional than the global level. While corporate tax rates are falling inside and outside the EU, we demonstrate using a large multiyear, multiregional data set that Eastern European countries have extremely low corporate tax rates relative to other EU and non-EU countries, even when controlling for multiple domestic economic and political factors. These findings support the potential efficacy of pursuing regional corporate tax reform to address the downward spiraling of rates in the EU.

scholarly journals Tax Competition in the European Union and Its Influence on the Shift in the Tax Burden

2007 ◽  
Vol 2007 (2) ◽  
pp. 55-72
Author(s):  
Danuše Nerudová ◽  
Svatopluk Kapounek ◽  
Jitka Poměnková
Keyword(s):  
European Union ◽  
Tax Competition ◽  
Tax Burden ◽  
The European Union

Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective

2021 ◽  
Vol 19 (164) ◽  
pp. 724-742
Author(s):  
Ovidiu Constantin Bunget ◽  
Alin-Constantin Dumitrescu ◽  
Rodica Gabriela Blidisel ◽  
Oana Alina Bogdan ◽  
Valentin Burca ◽  
...  
Keyword(s):  
European Union ◽  
Financial Reporting ◽  
Stock Exchange ◽  
The European Union ◽  
Data Set ◽  
Audit Market ◽  
Audit Firms ◽  
Financial Audit ◽  
The One ◽  
Non Audit Services

The audit market, developed out of the need to strengthen the credibility and the quality of financial reporting, has led since the 1980s to a concentration around large audit firms, the dominance effect being marked on the one hand by the auditor’s increasing reputation and notoriety, and on the other hand by the client’s association with a reputed auditor, which contributes to improving the company’s image on the market. In this context, a major issue is represented by the level of the fees charged, as they represent key elements that may affect the auditor’s independence. Moreover, a sensitive aspect is the relationship between the fee charged for financial audit services and the one for non-audit services and the compensation practices between them. The European Commission wants to facilitate competition in an overly concentrated market and also provide the opportunity for small and medium-sized audit firms to become active players in the large corporate audit market through joint audit, in which at least one of the audit firms is not part of the Big4 group. The mandatory audit firm rotation and the limitation on the non-audit services provided are the main aspects of the recent audit reform that directly influences the fee level. The main purpose of this study is to analyse whether there is a pattern of audit costs at the community level. In this context, this paper aims to assess the uniformity of audit costs, namely to determine the structure of the audit market in the European Union. The research involves data set comparison methods, by analysing a sample of 2,896 firms listed on the stock exchange in 35 different states over the period 2013-2021.

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