Subnational tax competition neutralizes wealth taxes unless central governments impose mandatory rate floors.
To prevent capital flight and tax arbitrage to tax-friendly regions, central governments must implement national safety-net taxes that override regional fiscal autonomy.
The same conclusion keeps arriving from across the workspace's research — 1 topics independently instantiate this theme. Filter the evidence by where it came from:
It shows how central governments employ state-level fiscal equalization penalties to neutralize local tax competition and prevent regional rate-cutting arbitrage.
This shows how unchecked tax competition across European states historically led to the collapse and abandonment of regional wealth regimes.
Spain's national government successfully neutralized regional tax flight by imposing a national safety-net tax that overrides regional tax holidays.