Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We extend Bond and Gresik (On the incentive compatibility of universal adoption of destination‐based cash flow taxation, International Tax and Public Finance, October 2022) by analyzing the equilibrium capital expense deduction policies that arise when countries compete for multinational investment under destination‐based taxation. Bond and Gresik proved that destination‐base cash flow taxation cannot arise as a tax competition equilibrium. We show that policies that allow for no deduction (income taxation) and those that allow a partial deduction can arise in equilibrium. In the former case, public good provision will be efficient. In the latter case, weak over‐provision of the public good will arise.