Interjurisdictional Tax Competition: An Economic Perspective

This Comment begins, in Part II, with a cursory look at tax competition in the public sector. This part provides a theoretical development of tax competition and examines the role tax competition plays in the design of local fiscal systems. Moving from theory to practice, Part III of this Comment examines how tax competition recently influenced tax reform in Nebraska, pressuring local officials to reduce tax progressivity and to engage in tax discrimination against immobile business. Part IV is the focal point of the Comment, analyzing in some detail the economic ramifications of tax competition. This economic analysis focuses primarily on issues of efficiency and equity. Finally, Part V provides some concluding remarks and a plea for further understanding of the growing influence tax competition has on our local public economies