Fiscal dumping

Fiscal dumping is the term used to define the process that in some competitive environment public institutions are incentivized to lower taxes in order to collect more money or even collect the same. These environments are usually modeled by games as the Public goods game in which the Nash equilibrium is 0 taxes, where the best for the whole group is not that.

The effects of taxes changes could be classified in:

• Endogenous effects: we only have to study the directly affected agents that they have to pay more taxes to understand the effects.
• Exogenous effects: in which we have to study the collection of other public neighborhood institutions in order to understand them.

See also

Game Theory, Race to the bottom, Public goods game, Prisoner’s dilemma, Price dumping, Social dumping, Paradox of competition

Material

• Parker, George. “Berlin Accuses Vienna of ‘Fiscal Dumping’.” Financial Times (2006): 8-9.
• Christensen, J. (2003). TAX DISTORTIONS, FISCAL DUMPING AND TAX FRAUD.
• http://www.parliament.gov.za/live/content.php?Item_ID=2495

Papers

• Lipietz, A. (1996). Social Europe: The post‐Maastricht challenge. Review of International Political Economy, 3(3), 369-379.