Conditional tax competition in American states Journal Article uri icon



  • AbstractCross-border commercial activity raises issues in federations where multiple jurisdictions can claim the right to tax the same income. In the United States, this coordination problem is resolved by splitting the tax base according to the geographic distribution of firms’ sales, capital and labour. The weight of each factor is determined on a state-by-state basis, which opens room for competitive legislative behaviour. In this complex issue area, however, policymakers must invest lot of resources to monitor competitors, evaluate policy alternatives and shepherd tax reform through the legislative process. This implies that highly professional legislatures should be more responsive to the policies of nearby states. We consider data on most American states over the period from 1986 to 2013 and find strong evidence ofconditional spatial dependence. Our findings suggest that policy diffusion may often be moderated by institutional and political factors.

publication date

  • June 1, 2018

has restriction

  • green

Date in CU Experts

  • January 17, 2018 2:41 AM

Full Author List

  • Arel-Bundock V; Parinandi S

author count

  • 2

Other Profiles

International Standard Serial Number (ISSN)

  • 0143-814X

Electronic International Standard Serial Number (EISSN)

  • 1469-7815

Additional Document Info

start page

  • 191

end page

  • 220


  • 38


  • 2