| Various countries in the European Union are
in the process of reducing taxes and above all improving supply-side conditions.
The aim is to reduce costs and make countries more attractive for investors. That
said, trade interdependence, a unified monetary policy in the Eurozone and capital
mobility permit greater tax competition and strengthen the need for coordination.
But this is hard to achieve, given that interests differ across countries in terms
of economic structures, size, EMU membership and location. This explains why it
has been so difficult for harmonisation to move forward, and why the trend in
policy is merely to remove the most evident distortions, though this risks pushing
the costs of competition onto the least mobile tax bases. |
Abstract |
