The Redistributive Effects of the Pit Decentralization: Evidence from the Italian Case
In recent years Regions and Municipalities in Italy have been assigned the power to apply local surtaxes on the personal income tax levied at national level. The aim of this paper is twofold. First, from a positive perspective, we measure the redistributive effects produced by the adoption of these local surtaxes. By using a sample of tax returns representative on a regional basis, we find that the redistributive effects are slightly enhanced by the introduction of local surtaxes as a result of an increase in tax incidence, given that the introduction of local surtaxes is not offset by a corresponding reduction of national taxation, and a relatively smaller reduction in tax progressivity. Vertical redistribution and horizontal inequity are also distinctly considered. It turns out that at both national and regional level local surtaxes slightly increase these two components, roughly in the same proportion, whereas variations are relatively differentiated at the regional level. Secondly, from a normative perspective, we design a possible welfare-improving tax reform in which the simplification of the personal income tax is combined with its partial decentralization. When the redistributive impact of this reform is assessed, the new tax structure welfare-dominates the current centralized tax both at the national level and within any single Region.
Volume (Year): 64 (2005)
Issue (Month): 2-3 (November)
|Contact details of provider:|| Postal: |
Web page: http://www.gde.unibocconi.it/
|Order Information:|| Web: http://www.gde.unibocconi.it Email: |
References listed on IDEAS
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.:
- Xavier Ramos & Peter J Lambert, . "Horizontal Equity and Differences in Income Tax Treatment: A Reconciliation," Discussion Papers 98/24, Department of Economics, University of York.
- Isabelle Joumard & Per Mathis Kongsrud, 2003.
"Fiscal Relations across Government Levels,"
OECD Economic Studies,
OECD Publishing, vol. 2003(1), pages 155-229.
- Gaimpaolo Arachi & Alberto Zanardi, 2004. "Designing Intergovernmental Fiscal Relations: Some Insights from the Recent Italian Reform," Fiscal Studies, Institute for Fiscal Studies, vol. 25(3), pages 325-365, September.
- Peter Lambert & Xavier Ramos, 1997. "Horizontal Inequity and Vertical Redistribution," International Tax and Public Finance, Springer, vol. 4(1), pages 25-37, January.
- Nuria Badenes & Julio LÃ³pez-Laborda & Jorge Onrubia & JesÃºs Ruiz-Huerta, 2001. "Simplification and Decentralization of the Income Tax," Public Finance Review, , vol. 29(1), pages 49-60, January.
- Messere, Ken & de Kam, Flip & Heady, Christopher, 2003. "Tax Policy: Theory and Practice in OECD Countries," OUP Catalogue, Oxford University Press, number 9780199241484, March.
- Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
- Richard Miller Bird, 1999. "Rethinking Subnational Taxes: A New Look At Tax Assignment," IMF Working Papers 99/165, International Monetary Fund.
- Aronson, J Richard & Johnson, Paul & Lambert, Peter J, 1994. "Redistributive Effects and Unequal Income Tax Treatment," Economic Journal, Royal Economic Society, vol. 104(423), pages 262-70, March.
When requesting a correction, please mention this item's handle: RePEc:gde:journl:gde_v64_n2-3_p215-246. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Erika Somma)
If references are entirely missing, you can add them using this form.