06/10/2005 8:43:48 am
Tax-Competition at Work. In the latest edition of The Economist, there is a full-page ad that provides the "Hitch-hikers? guide to low taxes". It is placed there by the Austrian Business Agency, somewhat ironically "a government-operated consulting firm". The target-group is obviously investors and the message is that Austria now has low corporate tax (at 25 %). The corporate tax was decreased by January from 34 %. This is tax-competition at work. In a globalised world and the new Europe, countries compete by constantly improving the business climate. This leads to lower taxes - and hence higher growth and more new jobs.