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How does international tax competition affect fiscal democracy? To what extent does it constrain the autonomy of democratic governments in choosing the level and structure of national taxation? While tax competition has not reduced the level of total taxation in OECD-22 countries, it has revenue effects at the level of selected taxes, especially taxes falling on mobile tax bases such as the corporate tax or taxes on private capital income. The nominal tax burden has shifted from capital to labor and consumption (domestic redistribution). While this result suggests that tax competition has a negative effect on national tax autonomy, because all competing countries see their ability to tax mobile capital constrained, small countries see their capacity to raise revenue from mobile capital increased at the expense of large countries (international redistribution). Because of these countervailing effects, the overall effect on small countries is ambiguous. By contrast, the tax autonomy of large countries has unambiguously declined because international and domestic pressures work in the same direction. Given that governments have to meet mandatory spending requirements on the expenditure side this may have contributed to higher fiscal deficits in large countries.

The paper analyzes the common assumption that the EU has little power over taxation. We find that the EU's own taxing power is indeed narrowly circumscribed: its revenues have evolved from rather supranational beginnings in the 1950s towards an increasingly intergovernmental system. Based on a comprehensive analysis of EU tax legislation and ECJ tax jurisprudence from 1958 to 2007, we show that at the same time, the EU exerts considerable regulatory control over the member states' taxing power and imposes tighter constraints on member state taxes than the US federal government imposes on state taxation. These findings contradict the standard account of the EU as a regulatory polity which specializes in apolitical issues of market creation and leaves political issues to the member states: despite strong safeguards, the EU massively regulates the highly salient issue of member state taxation.

We show that tax competition in the EU is shaped by four interrelated institutional mechanisms: 1) Market integration, by reducing the transaction costs of cross-border tax arbitrage in the Single Market, 2) enlargement, by increasing the number and heterogeneity of states involved in intra-EU tax competition, 3) tax coordination, by restricting the range of competitive instruments at the disposal of governments, and 4) supranational judicial review by limiting the scope of unilateral defences against tax competition (judicialization). As a consequence, tax competition is significantly stronger in the EU, and the race to the bottom in corporate tax rates more pronounced than in the rest of the world.

Warum macht die Harmonisierung der Unternehmens- und Kapitalertragsbesteuerung in der Europäischen Union kaum Fortschritte, obwohl sie im Binnenmarkt heftigem Steuerwettbewerb ausgesetzt ist, und warum ist die Umsatzbesteuerung weitgehend harmonisiert worden, obwohl sie gegen Steuerwettbewerb ziemlich immun ist? Das Buch forscht nach der politischen Logik der europäischen Steuerpolitik. Es rekonstruiert die Entwicklung des Politikfeldes seit den fünfziger Jahren, untersucht, warum der Integrationsgrad insgesamt bisher so gering geblieben ist, und analysiert die Bedingungen, unter denen partielle Harmonisierungserfolge dennoch möglich waren. Am Ende steht die Frage, was sich aus alldem für die Zukunft lernen lässt.

How does globalisation affect taxation? The academic wisdom is split on this question. Some argue that globalisation spells the beginning of the end of the national tax state while others maintain that it hardly constrains tax policy choices at all. This paper comes down in the middle. It finds no indication that globalisation will fatally undermine the national tax state, but still maintains that national tax policy is affected in a major way. The effect is not so much to force change upon the tax state as to reduce its freedom for change. Comparing the first three decades of the twentieth century to the last three decades, it is remarkable how much change and innovation there was then and how much incrementalism and stasis there is today. ; Welchen Einfluss hat die Globalisierung auf die nationale Steuerpolitik? In der Politikwissenschaft gehen die Meinungen auseinander. Manche fürchten, die Globalisierung bedeute den Anfang vom Ende des Steuerstaates. Andere hingegen meinen, die nationale Steuerautonomie werde durch die Globalisierung kaum eingeschränkt. Die Wahrheit, so vermutet dieser Beitrag, liegt in der Mitte. Es gibt keinen empirischen Hinweis, dass die Lebensfähigkeit des Steuerstaates fundamental in Frage gestellt würde. Trotzdem bleibt er vom Globalisierungsprozess nicht unberührt. Der Effekt besteht nicht so sehr darin, den Steuerstaat zu Reformen zu zwingen, die dieser sonst nicht vorgenommen hätte. Der Effekt ist vielmehr, seine Reformspielräume generell zu verkleinern. Im historischen Rückblick fällt auf, wie viele heftige steuerpolitische Umbrüche es vor dem Einsetzen des verschärften Globalisierungsprozesses in den siebziger Jahren des 20. Jahrhunderts gab und wie wenige danach.