Tax harmonization entails a uniform rate that may not suit all governments. Harmonization can advance collective governmental objectives only if the standard deviation of tax rates is less than the average downward effect of tax competition on rates. Since an efficient harmonized tax rate undoes...

Interest paid by U.S. state and local bonds is tax-exempt, making these bonds attractive to investors - though a tax rule limits arbitrage opportunities by restricting associated interest expense deductions. Prior to 1986, U.S. banks were not subject to the interest deduction limitation, making...

How does the opportunity to use tax havens influence economic activity in nearby non-haven countries? Analysis of affiliate-level data indicates that American multinational firms use tax haven affiliates to reallocate taxable income away from high-tax jurisdictions and to defer home country...