This study investigates how a revenue-maximizing tax strategy of local and central governments incorporates dual networks, namely, an inter-firm transaction network and an inter-country geography network. We assume a two-stage game in which governments propose discriminatory tax levels for firms, whereas each firm has an incentive to invest in a country near the foreign branch office of its transaction partner. In our model, the centrality index of the Kronecker product of the two networks describes the interplay among the location choices and tax strategies in the equilibrium. A stronger linkage within each network generally increases demand for investment and in turn raises overall tax levels to exploit the high demand. Although more central firms in the inter-firm network are likely to be levied higher taxes because of their high demand for investment, firms in the highest tax bracket differ among countries depending on their geographical location. Finally, we show that a uniform tax in which firms are not discriminated and networks do not matter is the socially optimal tax, which incorporates all inter-country externalities. We also investigate decentralized tax strategies based on the rule of non-discriminatory (uniform) taxation and show, by comparing social welfare under discriminatory and uniform tax regimes, that restricting tax discrimination improves social welfare.

中文翻译：

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双重网络对税收策略的影响：地理和交易

本研究调查了地方和中央政府的税收最大化税收策略如何结合双重网络，即企业间交易网络和国家间地理网络。我们假设有两个阶段的博弈，即政府对企业提出歧视性的税收水平，而每个企业都有动机在其交易伙伴的外国分支机构附近的国家进行投资。在我们的模型中，两个网络的Kronecker乘积的中心指数描述了均衡中的地理位置选择和税收策略之间的相互作用。每个网络之间更紧密的联系通常会增加投资需求，从而提高总体税收水平，以利用高需求。尽管由于公司间较高的投资需求，公司间网络中的更多中央公司可能会被征收更高的税款，但各国税金最高的公司却因地理位置而异。最后，我们表明，不歧视公司且网络不重要的统一税是社会最优税，它包含了所有国家间的外部性。我们还研究了基于非歧视性（统一）税收规则的分散税收策略，并通过比较歧视性和统一税收制度下的社会福利，表明限制税收歧视可以改善社会福利。我们表明，不歧视公司且网络不重要的统一税是社会最优税，它包含了所有国家间的外部性。我们还研究了基于非歧视性（统一）税收规则的分散税收策略，并通过比较歧视性和统一税收制度下的社会福利，表明限制税收歧视可以改善社会福利。我们表明，不歧视公司且网络不重要的统一税是社会最优税，它包含了所有国家间的外部性。我们还研究了基于非歧视性（统一）税收规则的分散税收策略，并通过比较歧视性和统一税收制度下的社会福利，表明限制税收歧视可以改善社会福利。