Taxation of Asset Income in the Presence of a World Securites Market / Roger H. Gordon, Hal R. Varian.

Format:

Book

Author/Creator:

Gordon, Roger H.

Contributor:

National Bureau of Economic Research.

Varian, Hal R.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1994.

NBER working paper series no. w1994

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1986.

Summary:

This paper shows, using a standard CAPM model of security prices in a world market,

that even small countries can affect the price of domestically issued risky securities, while

large countries can affect the prices of all securities. As a result, countries have the incentive to set tax rates such that in equilibrium investors specialize in domestic securities, and net capital flows between countries are restricted. Each country does this to increase the utility of domestic residents, taking as given the tax policies of other governments, but the net outcome is a reduction in world efficiency and likely a reduction in the utility of all individuals.

Notes:

Print version record

August 1986.