Global Tax Revolution

The Rise of Tax Competition and the Battle to Defend It

By Chris EdwardsDaniel J. Mitchell,

Publisher: Cato Institute

Imprint: Cato Institute

In the world's increasingly integrated economy, competition between governments to attract investment and skilled workers is heating up quickly. Increasingly, nations are waging this battle by overhauling their tax codes to create a more attractive business environment-a process known as tax competition. The United States used to be the best place in the world to do business, but today its income tax is a huge drag on economic growth. America needs to change course and learn from the best tax reforms abroad, such as the flat taxes that have been enacted in more than 20 countries. Policymakers also need to defend against international efforts to squelch tax competition when nations try to form cartels, which damage global prosperity and reduce incomes.

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