Tax Competition and Trade Protection

This paper reconsiders the question of whether tax competition for mobile capital leads to tax rates on capital that are too low or too high from the combined viewpoint of the competing regions (or countries in an economic union). In contrast to standard models of tax competition, both commodity trade and capital mobility is allowed to occur between the competing regions and the rest of the world. A key result of the analysis is that whether the capital taxes are too low or high depends on the degree of external trade protection. When the country's central government is free to set the tariff, tax competition leads to inefficiently low tax rates. But in the absence of a tariff, tax rates can be too high. In particular, regions may choose to subsidize capital in equilibrium as a means of inducing favorable terms-of-trade effects, but the subsidy (i.e., a negative tax) will then be too low because an increase in a single region's subsidy benefits other regions by reducing their relative quantities of subsidized capital. These results are discussed in the context of the European Union's Single Market, where non-EU firms have responded to the 'Fortress of Europe' by increasing foreign direct investment.

Antimalarial activity of prodrugs of N-branched acyclic nucleoside phosphonate inhibitors of 6-oxopurine phosphoribosyltransferases

Acyclic nucleoside phosphonates (ANPs) that contain a 6-oxopurine base are good inhibitors of the human and Plasmodium falciparum 6-oxopurine phosphoribosyltransferases (PRTs), key enzymes of the purine salvage pathway. Chemical modifications, based on the crystal structures of several inhibitors in complex with the human PRTase, led to the design of a new class of inhibitors - the aza-ANPs. Because of the negative charges of the phosphonic acid moiety, their ability to cross cell membranes is, however, limited. Thus, phosphoramidate prodrugs of the aza-ANPs were prepared to improve permeability. These prodrugs arrest parasitemia with IC values in the micromolar range against Plasmodium falciparum-infected erythrocyte cultures (both chloroquine-sensitive and chloroquine-resistant Pf strains). The prodrugs exhibit low cytotoxicity in several human cell lines. Thus, they fulfill two essential criteria to qualify them as promising antimalarial drug leads

A modified thymine for the synthesis of site-specific thymine-guanine DNA interstrand crosslinks

DNA interstrand crosslinks (ICLs) are highly cytotoxic lesions formed by a variety of important anti-tumor agents. Despite the clinical importance of ICLs, the mechanisms by which these lesions are repaired in mammalian cells have so far remained elusive. One of the obstacles in the study of ICL repair has been the limited availability of suitable methods for the synthesis of defined site-specific ICLs. We report here the synthesis of a site-specific ICL containing an ethylene-bridged G-T base pair based on the incorporation of a crosslink precursor containing a selectively reactive group on one strand using solid-phase synthesis. 3-(2-chloroethyl)thymidine was incorporated into oligonucleotides and underwent ICL formation upon annealing to a complementary strand by reacting with the base opposite to the modified T residue. A strong preference for ICL formation with a G residue opposite the reactive T was observed. Detailed characterization of the reaction product revealed that the alkylation reaction occurred with the O-6 group of G and a mechanism accounting for this preference is proposed. These G-T crosslinks introduced here will be useful for studies of ICL repair

Do higher corporate taxes reduce wages? : Micro evidence from Germany

Because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages. We circumvent these problems by using an 11-year panel of data on 11,441 German municipalities' tax rates, 8 percent of which change each year, linked to administrative matched employer-employee data. Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill. The direct wage effect, arising in a collective bargaining context, dominates, while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements, bear a larger share of the corporate tax burden