IDEAS home Printed from https://ideas.repec.org/a/ris/invreg/0163.html
   My bibliography  Save this article

The design of mix of tax shares from a financial perspective

Author

Listed:
  • Estellera, Alejandro

    (Universitat de Barcelona)

  • Navas, Jorge

    (Universitat de Barcelona)

  • Sorribas, Pilar

    () (Universitat de Barcelona)

Abstract

The introduction of a mix of tax shares has been the main reform of the Spanish regional financing system,in effect since January 2002.The aim of this pa- per is obtaining,given a basic expenditure needs,its optimal composition for each re- gional government (so-called «Comunidad Autónoma de Régimen Común »)and for the central government.The optimality of the mix comes from the minimisation of the variance of the mix of taxes given a certain tax yield (Markowitz,1952)and gua- ranteeing,at the same time,the financial sufficiency in the first year.The results ob- tained from applying the methodology for the period 2002-07 show a certain hetero- geneity among regions with respect to the composition of the optimal tax mix.As long as both tax yield and financial risk are taken into consideration,the preferred ta- xes are gasoline taxes,alcohol taxes,and cigarette taxes.Given that these excise ta- xes do not guarantee financial sufficiency,these are complemented with tax shares in the VAT and in the personal income tax.In the extreme cases in which either only tax yield or financial risk is taken into account,with respect to the complementary tax shares,regions prefer the VAT and the personal income tax,respectively.

Suggested Citation

  • Estellera, Alejandro & Navas, Jorge & Sorribas, Pilar, 2005. "The design of mix of tax shares from a financial perspective," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 7, pages 69-89.
  • Handle: RePEc:ris:invreg:0163
    as

    Download full text from publisher

    File URL: http://www.aecr.org/images/ImatgesArticles/2007/04%20Esteller.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Bob Jessop & Ngai-Ling Sum, 2000. "An Entrepreneurial City in Action: Hong Kong's Emerging Strategies in and for (Inter)Urban Competition," Urban Studies, Urban Studies Journal Limited, vol. 37(12), pages 2287-2313, November.
    2. anonymous, 2002. "Regional approaches to economic development," Community Reinvestment, Federal Reserve Bank of Kansas City, issue Win.
    3. D J Jin & R R Stough, 1998. "Learning and learning capability in the Fordist and post-Fordist age: an integrative framework," Environment and Planning A, Pion Ltd, London, vol. 30(7), pages 1255-1278, July.
    4. D J Jin & R R Stough, 1998. "Learning and Learning Capability in the Fordist and Post-Fordist Age: An Integrative Framework," Environment and Planning A, , vol. 30(7), pages 1255-1278, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    regional financing; mix of tax shares; financial risk;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:invreg:0163. 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: (Julieta Llungo-Ortíz). General contact details of provider: http://edirc.repec.org/data/aecrrea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.