Vertical Tax Externalities in the Theory of Fiscal Federalism
AbstractFederal structures create the possibility of vertical tax externalities between levels of government, with the private sector's response to the tax policy decisions of one level affecting the tax base of the other. Such effects arise most obviously when both levels of government co-occupy the same tax base. This paper reviews and extends recent results on the implications of such externalities for the relationship between state and federal tax rates, the equilibrium levels of these taxes, the (ir)relevance of experience in federal countries for analyzing international tax issues, the pattern of intergovernmental grants, and the assignment of tax powers.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 45 (1998)
Issue (Month): 3 (September)
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Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- Michael Keen, 1997. "Vertical Tax Externalities in the Theory of Fiscal Federalism," IMF Working Papers 97/173, International Monetary Fund.
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
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- repec:fth:louvco:9803 is not listed on IDEAS
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