This paper studies tax policy interaction among local governments for both mobile and immobile tax bases. We exploit exogenous changes in the local tax setting of German municipalities due to participation in state debt reduction programs to learn about the size, scope and nature of strategic...

China initiated the Value-Added Tax (VAT) reform on May 1, 2016, which replaced Business Tax (BT) with VAT in an effort to reduce the burden of taxpayers and benefit enterprises and industries. China primarily levied VAT on the goods sector and BT on the service sector. With the VAT system, the...