TAX COMPETITION – AREAS OF DISPLAY AND EFECTS Cover Image

TAX COMPETITION – AREAS OF DISPLAY AND EFECTS
TAX COMPETITION – AREAS OF DISPLAY AND EFECTS

Author(s): Narcis Eduard Mitu
Subject(s): Economy
Published by: Editura Universitaria Craiova
Keywords: tax competition; positive effects; negative effects; flat tax

Summary/Abstract: In the past, governments had more freedom in setting their taxes as the barriers to free movement of capital and people were high. The gradual process of globalization is lowering these barriers and results in rising capital flows and greater manpower mobility. Tax competition exists when governments are encouraged to lower fiscal burdens to either encourage the inflow of productive resources or discourage the exodus of those resources. With tax competition in the era of globalization politicians have to keep tax rates “reasonable” to dissuade workers and investors from moving to a lower tax environment. Most countries started to reform their tax policies to improve their competitiveness. However, the tax burden is just one part of a complex formula describing national competitiveness. The other criteria like total manpower cost, labor market flexibility, education levels, political stability, legal system stability and efficiency are also important.

  • Issue Year: 2008
  • Issue No: 11
  • Page Range: 33-42
  • Page Count: 10
  • Language: English
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