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What has been the tax competition experience of the past 20 years?

Author

Listed:
  • Rachel Griffith

    (Institute for Fiscal Studies and IFS and Manchester)

  • Alexander Klemm

    (Institute for Fiscal Studies)

Abstract

This paper describes tax reforms in OECD countries over the last 20 years and how they are related to tax competition. Both individual countries' reforms and multilateral initiatives and developments are covered. This is followed by an overview of the empirical evidence on tax competition. Our conclusion is that the evidence for some interdependence in tax setting behaviour is strong, although the exact process driving this remains unclear. While the most basic tax competition models fail to explain the development in OECD countries, there is more than one possible explanation for the reforms undertaken if more advanced models are considered. The multilateral initiatives that were implemented however do not seem to be related to resource-based tax competition, instead they are about taxing rights.

Suggested Citation

  • Rachel Griffith & Alexander Klemm, 2004. "What has been the tax competition experience of the past 20 years?," IFS Working Papers W04/05, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:04/05
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    File URL: http://www.ifs.org.uk/wps/wp0405.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporation tax;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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