This paper reviews the recent theoretical literature that analyzes the European Union's policy to eliminate preferential corporate-tax regimes and the proposal to introduce a consolidated EU tax base with formula apportionment for the taxation of multinational firms. Since neither proposal...

Models of capital tax competition typically assume that countries have identical per-capita endowments. This paper presents a model with endogenous capital and labor supply where countries are unequal, and shows that countries do not necessarily engage in wasteful tax competition, in the sense...