All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

Thomas Eichner and Marco Runkel
''Efficient tax competition under formula apportionment without the sales factor''
( 2012, Vol. 32 No.4 )
Within a tax competition framework, this note points out that the tax principle of Formula Apportionment may render corporate income taxation of multinational enterprises efficient even if a sales apportionment factor is not available. This is shown for constant returns to scale production functions with substitution elasticity greater than or equal to one. In the special case of a Cobb-Douglas production function, efficiency is attained either if the formula uses only payroll or if the formula weights on production inputs equal these inputs' production elasticities.
Keywords: tax competition, Formula Apportionment, sales factor
JEL: H7 - State and Local Government; Intergovernmental Relations: General
Manuscript Received : Aug 07 2012 Manuscript Accepted : Oct 09 2012

  This abstract has been downloaded 1593 times                The Full PDF of this paper has been downloaded 152486 times