This paper explores the intricate relationship between taxation principles and cross-border labor dynamics in an increasingly integrated global economy. As countries grapple with the implications of tax competition, we examine whether consumer goods should be taxed in the country of production or consumption. The analysis also extends to the emergence of skilled labor mobility, whose mobility has been facilitated by evolving labor regulations and digital technology. In addition, firms are internationally mobile without costs as taxes vary. By comparing the destination and origin tax principles, we reveal that while the noncooperative destination principle can achieve the first-best by neutralizing fiscal externalities, in the origin principle persistent externalities lead the level of the noncooperative tax above the Pareto efficient level.