This paper examines the endogenous choice of unit and ad valorem taxes in a model of tax competition with unemployment. Governments maximize objective functions that are a weighted sum of regional welfare and revenue. In the tax competition model, a high fixed wage rate generates unemployment and employment externalities. This effect can be either positive or negative because of freely mobile capital among regions. Without unemployment, revenue-maximizing governments choose unit taxes as their tax instrument to avoid revenue losses from intense tax competition under ad valorem taxes. However, with unemployment, positive employment externalities generate additional benefits for using ad valorem taxes to stimulate employment. Therefore, the present study shows that one region chooses an ad valorem tax, whereas the other chooses a unit tax, or that both governments use ad valorem taxes depending on employment externalities.

本文研究了失业税收竞争模型中单位税和从价税的内生选择。政府最大化目标函数，该函数是地区福利和收入的加权总和。在税收竞争模型中，高固定工资率会产生失业和就业外部性。由于资本在地区之间自由流动，这种影响可能是积极的，也可能是消极的。在没有失业的情况下，追求收入最大化的政府选择单位税作为税收工具，以避免从价税下激烈的税收竞争造成收入损失。然而，在失业的情况下，积极的就业外部性会为使用从价税刺激就业带来额外的好处。因此，本研究表明，一个地区选择从价税，而另一个地区选择单位税，