01723cas a2200241 a 4500 AALejournalIMF010068 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451965636 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Optimal Tax/Expenditure Competition Strategy of Governments in the Presence of Time Inconsistency : The Case for Investment Tax Abacemencs. Washington, D.C. : International Monetary Fund, 1990. 1 online resource (20 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Businesses which seek the location that offers the highest profitability are likely to consider tax incentives and the level of government services available. However, once a business commits itself to a locality, high moving costs render it vulnerable to future tax increases or denial of government services. Fear of time inconsistency will lower expected business profitability in a region. This paper indicates that a developing country or locality can attract a higher level of capital with a tax abatement scheme which provides a subsidy (funded by a capital income tax) equivalent to moving/setup costs. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1990/059 Full text available on IMF http://elibrary.imf.org/view/journals/001/1990/059/001.1990.issue-059-en.xml IMF e-Library