Economic Impacts of Interjurisdictional Tax Competition
Nations compete in designing corporate and individual income tax regimes, in part with the goal of attracting business activity. Policy proposals to harmonize tax rules across countries are currently at the center of global tax policy debates. Competitive pressures also arise within federations. State and local governments compete to attract businesses by offering development incentives, business public services, and various types of tax relief. Interjurisdictional competition can operate as a constraint on tax and expenditure policies, distort the location of economic activity relative to a no-tax or equal-tax regime, and affect household welfare through a variety of different channels.
To promote research on the economic effects of interjurisdictional tax competition, particularly with regard to businesses, the NBER, with generous support from Arnold Ventures, will convene a virtual conference on Friday, January 28, 2022. The conference will be organized by David Agrawal (University of Kentucky), James Poterba (MIT and NBER), and Owen Zidar (Princeton University and NBER). The conference will bring together researchers in accounting, economics, finance, law, and political science who approach tax competition issues from different perspectives.
Research on any issue pertaining to interjurisdictional competition in business tax policy is welcome. Topics of particular interest include:
- Measurement of effective tax rate differentials across jurisdictions, recognizing development incentives that complement tax policies as well as heterogeneity across industries and firms.
- Estimation of the impact of tax differentials on business location decisions, and of the “rate of return,” measured in jobs, future tax revenue, or along other dimensions, to offering tax incentives.
- Estimation of the effects of business tax competition on wages, property values, prices, and consumer welfare.
- Analysis of case studies in which jurisdictions competed for high-profile businesses, with evidence on the consequences for both the winning jurisdiction and other competitors.
- Estimation of how tax harmonization policies, including tax treaties, have affected tax receipts, allocative efficiency, and the distribution of after-tax resources.
- Evaluation of the behavioral parameters that determine the welfare effects of business tax harmonization across jurisdictions.
- Estimation of the interjurisdictional fiscal externalities associated with business tax changes.
- Analysis of the effects of income sourcing rules and apportionment formulae on tax revenues and the location of capital investment and employment.
- Identification and estimation of the factors that affect the strength of strategic interdependence of business tax policies across jurisdictions.
- Comparison of the effects of bidding for individual firms versus competing with broadly-applicable tax policies.
- Assessment of how inter-state competition for corporate chartering services affects business location decisions and shareholder welfare.
- Analysis of how sub-federal personal income tax rates on pass-through businesses affect economic activity, mobility, and entrepreneurship.
- Exploration of how changes in tax enforcement regimes influence the effects of interjurisdictional tax differentials.
The NBER welcomes submissions of both empirical and theoretical research on all aspects of interjurisdictional business taxation, including papers by scholars who are early in their careers, who are not NBER affiliates, and who are from under-represented groups. To be considered for inclusion on the program, papers must be uploaded by midnight (EDT) November 10, 2021 via the following link:
Please do not submit papers that have been accepted for publication and that will be published by January, 2022. Authors chosen to present papers will be notified by early December, 2021.
Questions about this conference may be addressed to firstname.lastname@example.org.