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Discussion Paper Details

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Title: Coordination and the fight against tax havens

Author(s): Kai A. Konrad and Tim Stolper

Publication Date: March 2015

Keyword(s): initiatives against harmful tax practices, tax evasion and tax havens

Programme Area(s): Public Economics

Abstract: The success or failure of the fight against tax havens is the outcome of a coordination game between a tax haven and its potential investors. Key determinants are the costly international pressure and the haven country's revenue pool. The latter is determined endogenously by the decisions of many individual investors. Our findings explain why some havens attract large sources of international investment and earn large revenues while other countries do not, and why their profits are not competed away. We identify a trade-off between fighting tax havens and high tax rates or, similarly, small fines for disclosed tax evasion.

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Bibliographic Reference

Konrad, K and Stolper, T. 2015. 'Coordination and the fight against tax havens'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10519