We augment the traditional model of tax competition with spillovers in public good provision. In our model, identical countries compete for mobile capital. A subset of these countries can coordinate their taxes and provide a public good that generates international spillovers. This subset forms a club of high taxes. Adopting a utility function that is linear for the public good and a quadratic production function, we calculate the equilibrium tax rates and capital allocation. The partial tax equilibrium is analogous to size differences. We show that the utility of both club and non-club countries increases with the number of participating members. We also demonstrate that an increase in the degree of spillovers benefits all, including countries outside the club, even though outsiders do not directly benefit from the spillovers. We show that in a world with many tax competitors, spillovers can restore the stability of cooperation and compensate for incentives to exit the club to win the tax competition.

我们通过公共物品供应中的溢出来扩展传统的税收竞争模型。在我们的模型中，相同的国家争夺移动资本。这些国家中的一部分可以协调其税收并提供产生国际溢出效应的公共物品。该子集构成了高税收俱乐部。我们采用对公共物品线性的效用函数和二次生产函数，我们计算出均衡税率和资本配置。部分税收平衡类似于规模差异。我们表明，俱乐部会员国和非俱乐部会员国的效用都随着参与会员人数的增加而增加。我们还证明，外溢程度的提高使所有人（包括俱乐部外的国家）受益，即使局外人并未直接从外溢中受益。