Politics or mobility? Evidence from us excise taxation
AbstractWe test for the state interdependence of gasoline and cigarette taxation in the US (1975-2006). We estimate a tax reaction function, and find that state interdependence is due solely to yardstick competition, since any interaction disappears completely in the case of states with lame duck governors. This result holds for both taxes: the short-run reaction of those states whose governor is eligible to stand for reelection is 0.13 and 0.21 for gasoline and cigarette taxation, respectively. In the long run, the cigarette tax rates levied in a jurisdiction match those of its neighbors perfectly, while the long-run reaction in the case of gasoline is much lower at 0.72.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2010/3.
Length: 25 pages
Date of creation: 2010
Date of revision:
Tax competition; political accountability; excise taxes;
Find related papers by JEL classification:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-02 (All new papers)
- NEP-PBE-2010-05-02 (Public Economics)
- NEP-POL-2010-05-02 (Positive Political Economics)
- NEP-PUB-2010-05-02 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jacobs, J.P.A.M. & Ligthart, J.E. & Vrijburg, H., 2007.
"Consumption Tax Competition Among Governments: Evidence from the United States,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-321895, Tilburg University.
- Jan Jacobs & Jenny Ligthart & Hendrik Vrijburg, 2010. "Consumption tax competition among governments: Evidence from the United States," International Tax and Public Finance, Springer, vol. 17(3), pages 271-294, June.
- Vrijburg, H. & Jacobs, J.P.A.M. & Ligthart, J.E., 2007. "Consumption tax competition among governments: Evidence from the United States," Research Report 07008, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Devereux, Michael P & Lockwood, Ben & Redoano, Michela, 2004.
"Horizontal and Vertical Indirect Tax Competition: Theory and Some Evidence From the USA,"
CEPR Discussion Papers
4470, C.E.P.R. Discussion Papers.
- Devereux, M.P. & Lockwood, B. & Redoano, M., 2007. "Horizontal and vertical indirect tax competition: Theory and some evidence from the USA," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 451-479, April.
- Devereux, Michael & Lockwood, Ben & Redoano, Michela, 2004. "Horizontal And Vertical Indirect Tax Competition : Theory And Some Evidence From The Usa," The Warwick Economics Research Paper Series (TWERPS) 704, University of Warwick, Department of Economics.
- Ben Lockwood & Giuseppe Migali, 2009.
"Did The Single Market Cause Competition in Excise Taxes? Evidence From EU Countries,"
Royal Economic Society, vol. 119(536), pages 406-429, 03.
- Lockwood, Ben & Migali, Giuseppe, 2008. "Did the Single Market Cause Competition in Excise Taxes? Evidence from EU Countries," The Warwick Economics Research Paper Series (TWERPS) 847, University of Warwick, Department of Economics.
- Salmon, Pierre, 1987.
"Decentralisation as an Incentive Scheme,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 3(2), pages 24-43, Summer.
- SALMON, Pierre, 1987. "Decentralization as an incentive scheme," Institut des MathÃ©matiques Economiques â Document de travail de lâI.M.E. (1974-1993) 98, Institut des Mathématiques Economiques. LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS, Université de Bourgogne.
- Maarten Allers & J. Elhorst, 2005. "Tax Mimicking and Yardstick Competition Among Local Governments in the Netherlands," International Tax and Public Finance, Springer, vol. 12(4), pages 493-513, August.
- John A., List & Daniel, Sturm, 2006.
"How Elections Matter: Theory and Evidence from Environmental Policy,"
Discussion Papers in Economics
768, University of Munich, Department of Economics.
- John A List & Daniel M Sturm, 2006. "How Elections Matter: Theory and Evidence from Environmental Policy," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1249-1281, November.
- List, John & Sturm, Daniel M, 2004. "How Elections Matter: Theory and Evidence from Environmental Policy," CEPR Discussion Papers 4489, C.E.P.R. Discussion Papers.
- John A. List & Daniel M. Sturm, 2004. "How Elections Matter: Theory and Evidence from Environmental Policy," NBER Working Papers 10609, National Bureau of Economic Research, Inc.
- Rork, Jonathan C., 2003. "Coveting Thy Neighbors' Taxation," National Tax Journal, National Tax Association, vol. 56(4), pages 775-87, December .
- Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
- Sole Olle, Albert, 2003. "Electoral accountability and tax mimicking: the effects of electoral margins, coalition government, and ideology," European Journal of Political Economy, Elsevier, vol. 19(4), pages 685-713, November.
- Avinash Dixit, 1996. "Special-Interest Lobbying and Endogenous Commodity Taxation," Eastern Economic Journal, Eastern Economic Association, vol. 22(4), pages 375-388, Fall.
- Michael A. Nelson, 2002. "Using Excise Taxes to Finance State Government: Do Neighboring State Taxation Policy and Cross-Border Markets Matter?," Journal of Regional Science, Wiley Blackwell, vol. 42(4), pages 731-752.
- Alejandro Esteller-More (Universitat de Barcelona) & Leonzio Rizzo (Universita di Ferrara), 2009.
"(Uncontrolled) Aggregate shocks or vertical tax interdependence? Evidende from gasoline and cigarettes,"
Working Papers in Economics
233, Universitat de Barcelona. Espai de Recerca en Economia.
- Esteller-Moré, Alejandro & Rizzo, Leonzio, 2011. "(Uncontrolled) Aggregate Shocks Or Vertical Tax Interdependence? Evidence From Gasoline And Cigarettes," National Tax Journal, National Tax Association, vol. 64(2), pages 353-79, June Cita.
- Alejandro Esteller-Moré & Leonzio Rizzo, 2009. "(Uncontrolled) Aggregate shocks or vertical tax interdependence? Evidence from gasoline and cigarettes," Working Papers 2009/24, Institut d'Economia de Barcelona (IEB).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.