It is claimed that tax policy is neither time- nor space-independent due to cross-border tax base mobility that induces spillovers. In other words, fiscal shocks in one country are supposed to have impact on fiscal policies in other countries. This paper verifies this question in two ways....

Tax revenues and the issuance of debt are interdependent because governments are afraid of becoming insolvent. Therefore the long-term tax policy involving: adjustment of capital taxation, taxation of explicit consumption and the issuance of bonds ensures solvency and hampers capital tax...