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Tax Effort of Local Governments and its Determinants: The Spanish Case

Author

Listed:
  • Jaime Valles-Gimenez

    (Department of Public Economics, Faculty of Economics and Business, University of Zaragoza)

  • Anabel Zarate-Marco

    (Department of Public Economics, Faculty of Economics and Business, University of Zaragoza)

Abstract

We have implemented frontier techniques to analyse the local tax effort and its determinants. The results show that municipalities have been quite responsible on average (tax efforts between 72-85 percent), although most municipalities can increase their tax efforts both making a more intensive use of their tax authority and improving the efficiency of their tax collection. To respond to the financing problems of municipalities near the tax frontier, it would be desirable to reform the legal framework to allow a greater tax capacity while leaving the decision on how to use this potential in hands of each unit of government.

Suggested Citation

  • Jaime Valles-Gimenez & Anabel Zarate-Marco, 2017. "Tax Effort of Local Governments and its Determinants: The Spanish Case," Annals of Economics and Finance, Society for AEF, vol. 18(2), pages 323-348, November.
    • Handle: RePEc:cuf:journl:y:2017:v:18:i:2:valles-gimenez
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    References listed on IDEAS

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    More about this item

    Keywords

    Local taxes; Tax effort; Frontier techniques; Efficiency; Use of tax authority;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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