Discussion of competitive, political, and economic factors influencing state tax policy changes.

INTRODUCTION

Omer and Shelley (2004) (hereafter Omer and Shelley) empirically examine whether t states engage in tax competition by the agency of changing their business income apportionment formulas. They carefully command for a number of economic and political factors that could the one and the other affect a state's ability to change its apportionment formula and influence its decision to make that change. The authors' implicit hypothesis is that after controlling for these other factors, tax competition variables should be positive and significant in explaining a state's decision to modify its