There are many reasons to admireSwitzerland.
The nation’s very effectivespending cap.
- The nation’s libertarian-leaninggovernance.
- The nation’s system of private pensions.
- The nation’s genuine decentralization.
- The nation’s support for gun rights.
- The nation’s high public sector efficiency.
For today, let’s focus on how tax competition is one of the benefits of Swiss decentralization.
More specifically, most fiscal policy (both taxes and spending) takes place at the cantonal and municipal level. And this means that the Swiss can vote with their feet if they want more government or less government.
Not surprisingly, they tend to move to lower-tax areas. In a summary for VoxEU, Isabel Martínez shares some of her research on the impact of tax cuts and tax competition in the canton of Obwalden.
…economic research has made important contributions, showing that top earners indeed relocate across borders for…
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