Abstract

The country’s ability to compete for financial and investment resources in the international arena depends on a number of factors that determine the favorable business environment, the level of protection of citizens’ rights, and the material well-being of the population. One of the indicators of the quality of the economic environment in the country is the level of tax competitiveness, as an integrated indicator that summarizes the indicators of the effectiveness of the tax system and the quality of tax policy. The article summarizes the arguments and counterarguments within the scientific discussion on the generalization of the main theories of formation and development of tax competitiveness of the country. The main purpose of the article is a comparative analysis of theories of tax competitiveness, determining the nature of the impact of tax competitiveness on indicators of economic and social development of the country. The methodological tools of the study are analytical and comparative methods, methods of generalization and synthesis. The object of research is the theory of the formation of tax competitiveness of the country. Based on the results of the analysis, a conclusion about the dual nature of the impact of tax competition on the country’s development indicators is made. Thus, tax competition reduces the level of taxation in countries, which negatively affects the amount of tax revenues and reduces the country’s potential to finance socio-economic development programs, stimulates the growth of labor migration and relocation of tax bases in jurisdictions with more attractive tax conditions. On the other hand, tax competition stimulates economic growth in the leading countries by increasing their investment attractiveness, business activity, stimulating certain sectors of the economy. The results of the study can be useful for public authorities in making decisions on identifying key vectors of public tax policy in the country.

Keywords: tax competitiveness, tax policy, tax rate, jurisdiction, economic security.

JEL Classification: H20, H71, F38.

Cite as: Tiutinyk, I., Mazurenko, O. (2021). The Theory Of International Tax Competition: Comparative Analysis. SocioEconomic Challenges, 5(3), 134-138. https://doi.org/10.21272/sec.5(3).134-138.2021

This work is licensed under a Creative Commons Attribution 4.0 International License

References

1. Brueckner, J.K. (2000). A Tiebout / Tax Competition Model. Journal of Public Economics, 77, 285-306. [CrossRef].
2. Bucovetsky, S. (1991). Asymmetric Tax Competition. Journal of Urban Economics, 30, 67-181. Available at: [Link].
3. Keen, M. (2008). Tax competitionю The New Palgrave Dictionary of Economics, Ed. Steven N. Durlauf and Lawrence E. Blume, Palgrave Macmillan. Available at: [Link].
4. Oates, W. E. (1972). Fiscal Federalism, Harcourt Brace Jovanovich Inc., New York, 54. Available at: [Link].
5. Parry, I.W.H. (2003). How Large are the Welfare Losses from Tax Competition? Journal of Urban Economics, 54, 39-60. Available at: [Link].
6. Patterson, B. & Martínez Serrano, F. (2003). Taxation in Europe: recent developments. European Parliament Working Paper ECON 131 EN 01-2003/ Luxemburg: European Commision. Available at: [Link].
7. Sinn, H. W. (1994). How Much Europe? Subsidiarity, Centralization and Fiscal Competition. Scottish Journal of Political Economy, 41, 85-107. Available at: [Link].
8. Sorensen, P.B. (2001). Tax Coordination in the European Union: What are the Issues? Swedish Economic Policy Review, 8, 143-195. Available at: [Link].
9. Wildasin, D. E. (1989). Interjurisdictional Capital Mobility: Fiscal Externality and a Corrective Subsidy. Journal of Urban Economics, 25, 193-212. Available at: [Link].
10. Wilson, J.D. (1987). Trade, Capital Mobility, and Tax Competition. Journal of Political Economy, 95, 835-85. [CrossRef].
11. Wilson, J.D. (1991). Tax Competition with Interregional Differences in Factor Endowments. Regional Science and Urban Economics, 21, 423-452. Available at: [Link].
12. Zodrow, G.R. & Mieszkowski, P. (1986). Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods. Journal of Urban Economics, 19, 356-370. Available at: [Link].