The Politics of an Emergent Global Regime for Controlling Tax Competition |
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| Authors: | Kenneth P Thomas |
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| Institution: | Kenneth I? Thomas is associate professor at the University of Missouri, St. Louis. He specializes in the field of international political economy. His main research interests are capital mobility, multinational corporations, and (controlling) competition for investment. His books include Capital Beyond Borders: States;and Firms in the Auto Industry, 1960-1994 (St. Martin's) and Competing for Capital: Europe and North America in a Global Era (Georgetown). |
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| Abstract: | This article probes what I call the emergent global regime for controlling tax competition. Since at least the early 1990s, states have perceived that competition for investment, whether through direct subsidies or tax incentives, threatens to undermine the fiscal underpinnings of the modern state, particularly in terms of its provision of social welfare programs. As states have provided financial or fiscal subsidies to capital (especially mobile capital), they have had to compensate through some combination of imposing higher levels of taxation on other actors, running higher deficits, and cutting spending. Each has shown itself to have substantial problems, and the response of states has now come full circle: to reconsider the competition for investment that causes the fiscal problems in the first place. |
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