Optimal Federal Taxes with Public Inputs
This paper deals with the solution to vertical expenditure externalities in a federation with two levels of government sharing taxes. Under these circumstances, the Nash equilibrium does not satisfy the condition for production efficiency in the provision of public inputs. This vertical expenditure externality is removed when the federal government, behaving as Stackelberg leader, chooses the optimal tax rate on l abor income. The sign of this tax rate depends on the elasticity of marginal productivity of the public input with respect to employment. M oreover, the previous result that the two vertical (tax and expenditure) externalities are independent of each other is confirmed here.
Volume (Year): 64 (2008)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: http://www.mohr.de/fa |
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
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.:
- Boadway, Robin & Keen, Michael, 2000.
Handbook of Income Distribution,
in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 12, pages 677-789
- Kotsogiannis, Christos & Martinez, Diego, 2008.
"Ad valorem taxes and the fiscal gap in federations,"
Elsevier, vol. 99(3), pages 431-434, June.
- Christos Kotsogiannis & Diego Martinez, 2007. "Ad Valorem Taxes and the Fiscal Gap in Federations," Discussion Papers 0703, Exeter University, Department of Economics.
- Bev Dahlby, 1996. "Fiscal externalities and the design of intergovernmental grants," International Tax and Public Finance, Springer, vol. 3(3), pages 397-412, July.
- Robin Boadway and Michael Keen, .
"Efficiency and the Optimal Direction of Federal-State Transfers,"
Economics Discussion Papers
445, University of Essex, Department of Economics.
- Robin Boadway & Michael Keen, 1996. "Efficiency and the optimal direction of federal-state transfers," International Tax and Public Finance, Springer, vol. 3(2), pages 137-155, May.
- Boadway, R & Keen, M, 1996. "Efficiency and the optimal direction of federal-state transfers," IFS Working Papers W96/01, Institute for Fiscal Studies.
- BOADWAY, Robin & MARCHAND, Maurice & VIGNEAULT, Marianne, .
"The consequences of overlapping tax bases for redistribution and public spending in a federation,"
CORE Discussion Papers RP
-1326, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Boadway, Robin & Marchand, Maurice & Vigneault, Marianne, 1998. "The consequences of overlapping tax bases for redistribution and public spending in a federation," Journal of Public Economics, Elsevier, vol. 68(3), pages 453-478, June.
- BOADWAY, Robin & MARCHAND, Maurice & VIGNEAULT, Marianne, 1998. "The consequences of overlapping tax bases for redistribution and public spending in a federation," CORE Discussion Papers 1998003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Dahlby, Bev & Wilson, Leonard S., 2003. "Vertical fiscal externalities in a federation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 917-930, May.
- Michael J. Keen & Christos Kotsogiannis, 2002. "Does Federalism Lead to Excessively High Taxes?," American Economic Review, American Economic Association, vol. 92(1), pages 363-370, March.
- Johnson, William R, 1991. "Decentralized Income Redistribution Reconsidered," Economic Inquiry, Western Economic Association International, vol. 29(1), pages 69-78, January.
When requesting a correction, please mention this item's handle: RePEc:mhr:finarc:urn:sici:0015-2218(200812)64:4_422:oftwpi_2.0.tx_2-y. 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: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.