The paper sets up an analytical framework within which the arguments for centralized vs. decentralized tax policy can be represented and weighed against each other. Two aspects of the debate are considered: first, the global welfare effects of 'harmonizing' tax reforms are discussed when...

An optimal taxation approach is employed to discuss the interaction between factor and commodity taxes for a small open economy when profit-earning firms are mobile internationally. In this framework, a destination-based commodity tax is shown to be superior to an origin-based VAT from an...

We set up a simple political economy model where economic integration raises the profitability of multinational firms. In this setting redistributive taxation may rise following economic integration, if the effects of the widened income gap dominate the higher excess burden of the tax.