Policy Forum: International Tax Policy—When the Gloves Come Off

Nations compete among themselves in various forms. Increasingly, tax policy is one such area, as countries seek to attract to themselves economic activity (and resulting benefits such as jobs and tax revenue) that exists (or could be created in) other countries, while retaining such economic activity as already exists within its borders. Never has economic activity been so skewed toward services and digital forms that have less and less physical connection to any particular jurisdiction and are increasingly capable of moving from one country to another. America's 2025 tariff outburst reflects the accelerating weaponization of tax systems within the larger competition among nations, and the United States in particular has shown itself quite willing to use various tax incentives and disincentives to shape both private sector decision making (within and outside its borders) and the policy choices of other countries. This article examines the past and present state of international tax competition among various different forms of taxation.