For high levels of trade costs (τ > τ 0), Figure 2 shows that economic integration implies that the equilibrium tax rate falls also for s = 1, because lower trade costs make the tax bases more tax sensitive.
For high levels of trade costs (τ > τ 0), Figure 2 shows that economic integration implies that the equilibrium tax rate falls also for s = 1, because lower trade costs make the tax bases more tax sensitive.