Previous work showing a positive impact of globalization on capital tax revenue as a percent of GDP claims to contradict theoretical results that tax competition pressures governments to reduce taxes on highly mobile assets. However, the observed relationship is not necessarily incompatible with...

Are the predictions of tax competition theory wrong? Recent empirical results on capital taxation suggest that this might be the case. While tax competition literature predicts that capital taxes decrease with increasing globalisation, empirical studies on various data find contradicting...