A critical examination of the effects of tax competition.
Policy Responses to Tax Competition provides an in-depth exploration of how jurisdictions design taxes on mobile economic factors. Tax competition between jurisdictions that seek to attract businesses and residents presents both opportunities and challenges. It can foster government efficiency and provide a counterweight to lobbying for increased spending, but it can also result in inefficiently low tax rates and revenue shortfalls as jurisdictions vie for tax bases. This volume examines the economic drivers and consequences of tax competition and presents empirical evidence on its effects.
Divided into three parts, the book first reviews existing research on the determinants and consequences of tax competition and related policy initiatives such as development incentives. The second section focuses on specific policies, such as the Kansas-Missouri noncompete pact and international measures like the OECD's Base Erosion and Profit Shifting initiative, that are designed to limit tax competition. It also considers the economic responses to these policies, the distributional impact of competition-reducing policies, and potential strategic reactions of other governments. The final section presents case studies of the effects of various policies, including inter-municipal cooperation in France and corporate tax equalization in Switzerland.
Altogether, this volume provides new insights into the nature of inter-jurisdictional tax competition and the range of potential responses available to jurisdictions at various levels in federal systems.
Edited by:
David R. Agrawal,
James M. Poterba,
Owen M. Zidar
Imprint: University of Chicago Press
Country of Publication: United States
Dimensions:
Height: 229mm,
Width: 152mm,
Spine: 43mm
Weight: 794g
ISBN: 9780226838595
ISBN 10: 0226838595
Series: National Bureau of Economic Research Conference Report
Pages: 536
Publication Date: 29 October 2025
Audience:
Professional and scholarly
,
College/higher education
,
Undergraduate
,
Further / Higher Education
Format: Hardback
Publisher's Status: Active
Introduction David R. Agrawal, James M. Poterba, and Owen M. Zidar 1. Open Economy Public Finance: Competition Among Governments David E. Wildasin 2. Subsidy Competition as an Auction Cailin Slattery 3. Limits to Competition: Strategies for Promoting Jurisdictional Cooperation David R. Agrawal 4. Wayfair: A Step Toward the Destination, but Sales Tax Competition Remains Donald Bruce, William F. Fox, and Alannah M. Shute Comment: Alan J. Auerbach 5. Interjurisdictional Competition and Coordination: Evidence from Kansas City Donghyuk Kim Comment: Cailin Slattery 6. Fiscal Federalism and the Role of the Income Tax Roger Gordon Comment: James R. Hines Jr. 7. Intergovernmental Grants and Policy Competition: Concepts, Institutions, and Evidence Jeffrey Clemens and Stan Veuger Comment: Brian Knight 8. Intermunicipal Cooperation in France and Related Tax Issues Marie-Laure Breuillé and Pascale Duran-Vigneron Comment: Stefanie Stantcheva 9. Minimum Tax Rates and Tax Competition: Evidence from Property Tax Limits in Finland Teemu Lyytikäinen Comment: Leah Brooks 10. Competition, Harmonization, and Redistribution: Corporate Taxes in Switzerland Marius Brülhart, Marko Köthenbürger, Matthias Krapf, Raphaël Parchet, Kurt Schmidheiny, and David Staubli Comment: Jan K. Brueckner Author Index Subject Index
David R. Agrawal is professor of economics and professor of law at the University of California, Irvine. James M. Poterba is the Mitsui Professor of Economics at MIT and president and CEO of the NBER. Owen M. Zidar is professor of economics and public affairs at Princeton University and a research associate of the NBER.
