TAX HARMONIZATION AND TAX COMPETITION IN THE EUROPEAN-UNION - LESSONSFROM SWITZERLAND

This paper presents empirical evidence on individual income tax compet ition in Switzerland. Tax competition has some influence on the spread of people with high income over the cantons, and it is partly capital ised in dwelling rents. However, it neither leads to a collapse of pub lic good supply nor makes redistribution by the fiscal authorities imp ossible. Thus, if tax competition works well in Switzerland there is n o reason why it should have disastrous effects in a future European Un ion.