Ad Valorem Taxes and the Fiscal Gap in Federations
AbstractThis paper investigates the implications of vertical fiscal externalities for the optimal federal tax and the sign of fiscal gap in the presence of ad valorem taxation. It is shown that the federal government can always achieve the second-best optimum for public good provision. The sign of the fiscal gap is, in general, ambiguous. The consequence of this is that a precise evaluation of the fiscal gap requires an explicit consideration of the underlying fundamentals of the federal economy.
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Bibliographic InfoPaper provided by Exeter University, Department of Economics in its series Discussion Papers with number 0703.
Date of creation: 2007
Date of revision:
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Ad valorem taxes; fiscal gap; externalities; fiscal federalism;
Other versions of this item:
- Kotsogiannis, Christos & Martinez, Diego, 2008. "Ad valorem taxes and the fiscal gap in federations," Economics Letters, Elsevier, vol. 99(3), pages 431-434, June.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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- Diego MartÃnez, 2007.
"Optimal federal taxes with public inputs,"
07.16, Universidad Pablo de Olavide, Department of Economics.
- Diego MartÃnez, 2008. "Optimal Federal Taxes with Public Inputs," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, TÃ¼bingen, Mohr Siebeck, TÃ¼bingen, vol. 64(4), pages 422-433, December.
- Diego Martinez & Tomas SjÃ¶gren, 2012.
"Vertical externalities with lump-sum taxes: how much difference does unemployment make?,"
2012/25, Institut d'Economia de Barcelona (IEB).
- Diego Martinez-Lopez & Tomas SjÃ¶ngren, 2014. "Vertical externalities with lump-sum taxes: how much difference does unemployment make?," European Journal of Government and Economics, Europa Grande, vol. 3(1), pages 75-87, June.
- Diego MartÃnez, 2014. "Vertical externalities revisited: new results with public inputs and unit taxation," Working Papers, Universidade de Vigo, GEN - Governance and Economics research Network 1403, Universidade de Vigo, GEN - Governance and Economics research Network.
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