The effects of tax deductibility on the mix of property taxes and use charges: an empirical analysis of the spanish case
AbstractThis paper tests some hypothesis about the determinants of the local tax structure. In particular, we focus on the effects that the property tax deductibility in the national income tax has on the relative use of the property tax and user charges. We deal with the incentive effects that local governments face regarding the different sources of revenue by means of a model in which the local tax structure and the level of public expenditure arise as a result of the maximizing behaviour of local politicians subject to the economic effects of the tax system. We attempt to test the hypothesis developed with data corresponding to a set of Spanish municipalities during the period 1987-9l. We find that tax deductibility provides incentives to raise revenues from the property tax but does not introduce a biass against user charges or in favor of overall spending growth.
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Bibliographic InfoPaper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 41.
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Date of creation: 1998
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Postal: Espai de Recerca en Economia, Facultat de CiÃ¨ncies EconÃ²miques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
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Find related papers by JEL classification:
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
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