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...

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...

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...