Delaying Integration of Immigrant Labor for the Purpose of Taxation + by Wolfram F. Richter University of Dortmund, CESifo, Munich, and IZA, Bonn Final version: December 2003 Abstract: Delayed Integration ("DI") is a rule for taxing migrants. It requires that immigrants be taxed in the host country only after some period of transition. Conversely, emigrants are released from the obligation to pay taxes only after a certain period. DI is an alternative to the Employment Principle and the Home-Country Principle. The former governs the international taxation of labor. The latter is a close substitute for the Nationality Principle, on which U.S. tax law is based. The paper studies DI in a setting which allows one to trade off the efficiency costs of distortionary taxation and of wasteful government. JEL Classification: H20, H73 Keywords: taxing migrants, Employment Principle, Nationality Principle, tax competition, public choice Address: Wolfram F. Richter, University of Dortmund, Department of Economics, 44221 Dortmund, Germany; email: Wolfram.Richter@tu-dortmund.de, phone: +49-231- 755-3146, fax: +49-231-755-5404 + Helpful comments and suggestions by C. Bayer, J. Brueckner, K. Schneider, S. Winer, two referees and by my discussants at various conferences S. Brown, L. Goerke, and S. Hämäläinen are gratefully acknowledged.