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How does globalization affect the implicit tax rates on labor income, capital income and consumption in the European Union?

How does globalization affect the implicit tax rates on labor income, capital income and consumption in the European Union?

Onaran, Özlem, Boesch, Valerie and Leibrecht, Markus (2011) How does globalization affect the implicit tax rates on labor income, capital income and consumption in the European Union? Economic Inquiry, 50 (4). pp. 880-904. ISSN 0095-2583 (Print), 1465-7295 (Online) (doi:10.1111/j.1465-7295.2011.00420.x)

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Abstract

This article analyzes the effects of globalization on implicit tax rates (ITRs) on labor income, capital income, and consumption in the EU15 and Central and Eastern European New Member States (CEE NMS). We find supportive evidence for an increase in the ITR on labor income in the EU15, but no effect on the ITR on capital income. There is evidence of convergence in terms of the ITR on consumption, as countries with higher than average ITR on consumption respond to globalization by decreasing their tax rates. There are important differences among the welfare regimes within the EU15. Social-democratic countries have decreased the tax burden on capital, but increased that on labor due to globalization. Globalization exerts a pressure to increase taxes on labor income in the conservative and liberal regimes as well. Taxes on consumption decrease in response to globalization in the conservative and social-democratic regimes. In the CEE NMS, there is no effect of globalization on the ITR on labor and capital income, but we find a negative impact on the ITR on consumption in the CEE NMS with higher than average ITR on consumption. (JEL H23, H24, H25, F19, F21).

Item Type: Article
Additional Information: [1] First published online: 23 September 2011. [2] Issue published online: 4 October 2012. [3] Published in print: October 2012. [4] Published as: Economic Inquiry, (2012), Vol. 50, (4), pp. 880–904. [5] Economic Inquiry is published on behalf of the Western Economic Association International. [6] Economic Inquiry was published by Oxford University Press until 2006.
Uncontrolled Keywords: globalization, tax burden, labor income, capital income, consumption, European Union,
Subjects: H Social Sciences > HB Economic Theory
Faculty / Department / Research Group: Faculty of Business > Work & Employment Research Unit
Related URLs:
Last Modified: 14 Oct 2016 09:22
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/9000

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