This paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment. Lack of commitment implies that tax policy is chosen prior to federal transfers. The paper's main result is that ex-post federal policy internalizes horizontal fiscal...

This paper shows how the distribution of the ownership of multinational companies and the labour market conditions, especially the wage formation process, influence the outcome of interjurisdictional tax competition and coordination. In particular, it sets forth that equilibrium corporate tax...

The issue of capital tax competition in source-based capital taxes is viewed to be unproblematic if residence-based capital taxation depends on the co-operation of source countries to assist in collecting tax revenues that benefit the residence country. We analyze conditions under which...

A well known result in the tax competition literature is that tax rates are set too low in the Nash equilibrium to finance an efficient level of public consumption goods. In this model we introduce international spillovers in public goods provision and show that such spillovers reduce, and in...

Tax competition is discussed as a source of inefficiency in international taxation and in fiscal federalism. Two preconditions for the existence of such effects of tax competition are that mobile factors locate or reside in jurisdictions with ceteris paribus lower tax rates and that taxes are...