A Tax on Tax Revenue: The Incentive Effects of Equalizing Transfers: Evidence from Germany
Several recent studies suggest that equalizing transfers in a federal system may distort the tax policy decisions of states. We study this issue for the German federal fiscal system. In a simple theoretical model, we first identify a substitution effect and an income effect of equalizing transfers. Our main hypothesis is that both effects should tend to reduce tax revenue of German states. We perform various empirical tests which confirm this hypothesis. Copyright Kluwer Academic Publishers 2002
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Volume (Year): 9 (2002)
Issue (Month): 6 (November)
Pages: 631-649
| Handle: | RePEc:kap:itaxpf:v:9:y:2002:i:6:p:631-649 |
| Contact details of provider: | Web page: http://www.springerlink.com/link.asp?id=102915
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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.:
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