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...

There is little doubt that the step towards a monetary union in Europe will increase both the distortionary effects of existing differences in national tax systems and the intensity of tax competition for internationally mobile commodity and factor tax bases. This paper discusses selected issues...

Tax competition for mobile capital can undermine the attempts of governments to redistribute income from rich to poor. I study whether international tax coordination can alleviate this problem, using a general equilibrium model synthesizing recent contributions to the tax competition literature....