The surge in brain disorders is having a notable effect on the economy. Brain Capital, which takes into account cognitive and non-cognitive brain abilities as well as brain health, is becoming increasingly essential to the world's economies. This is particularly evident in light of the progression of AI technology, which is substituting positions that require minimal skills.
The authors construct a tax competition model in which local governments finance business public services with either a source-based tax on mobile capital, such as a property tax, or a tax on production, such as an origin-based value added tax, and then assess which of the two tax instruments is more efficient.