In Switzerland, the cantons (states) offer low tax rates “ to tempt multinationals to establish regional headquarters or other operations in their jurisdictions. In doing so, other states are trying to take business away from Zug, the canton that has mastered the game of attracting business to such a degree that it is beginning to run out of space” [ Ball and Bryan- Low, 2010]. Does the lowering of tax rates by the cantons make sense from an efficiency standpoint?
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