The Economics of Tax Competition

In The Economics of Tax Competition – Harmonization vs. Liberalization Daniel J. Mitchell argues that the arguments surrounding tax competition are ultimately a debate about the size of government. Harmonization means higher tax rates and bigger government: freed from the rigour of competition, politicians would cater to special interests and resist fiscal reforms. By contrast, tax competition provides a much-needed check on the growth of government, and encourages pro-growth tax reform.

 

[gview file="http://www.adamsmith.org/sites/default/files/images/stories/tax-competition.pdf"]