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Measuring Tax and Incentive Competition: What Is the Best Yardstick?

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  • Peter Fisher
  • Alan Peters

Abstract

FISHER P. S. and PETERS A. H. (1997) Measuring tax and incentive competition: what is the best yardstick?, Reg. Studies 31, 751-764. Although much research has been conducted on state and local government economic development policy in the US, there is no agreement on how tax and other incentives should be measured. There are serious problems with the widely used summary measures of tax burdens and incentive programme activity. The hypothetical firm approach provides the best yardstick for measuring incentives. We review this approach, identify its major assumptions and present empirical estimates of the sensitivity of results to these assumptions. We show how discretionary incentives can be incorporated into hypothetical firm models. FISHER P.S. et PETERS A. H. (1997) Comment mesurer la competition entre les impots et les encouragements? Reg. Studies 31, 751-764. Bien que l'on ait fait beaucoup de recherches aux Etats-Unis au sujet des politiques de developpement economique locale et nationale, toujours estil que l'on n'est pas d'accord sur comment on devrait mesurer les encouragements, y compris les impots. Les mesures sommaires du poids fiscal et de la disponibilite de primes qui sont beaucoup employees, posent d'enormes problemes. La facon qui porte sur l'entreprise hypothetique fournit le meilleur point de repere pour la mesure des encouragements. On fait la critique de cette facon, identifie ses suppositions primordiales, et presente des estimations empiriques de la sensibilite des resultats a ses suppositions. On demontre comment on peut incorporer les encouragements discretionnaires dans les modeles d'entreprise hypothetique. FISHER P. S. und PETERS A. H. (1997) Messung von Steuer-und Anreizwettbewerb: Was ist der beste Massstab?, Reg. Studies 31, 751-764. Obschon staatliche und o¨rtliche Wirtschaftsentwicklungspolitik in den Vereinigten Staaten Gegenstand zahlreicher Untersuchungen gewesen ist, gibt es kein U¨bereinkommen daru¨ber, wie steuerliche und andere Anreize zu messen seien. Die weithin benutzte Zusammenfassung von Messungen von Steurlasten und dem Einsatz von Anreizprogrammen werfen ernsthafte Probleme auf. Den besten Massstab zur Messung von Anreizen stellt der Ansatz hypothetischer Firmen dar. Die Autoren besprechen diesen Ansatz, identifizieren seine Hauptannahmen, und legen empirische Scha¨tzungen der Genauigkeit der Ergebnisse fu¨r diese Annahmen vor. Sie zeigen, wie nach Ermessen vergebene Anreize in hypothetische Firmenmodelle eingebaut werden ko¨nnen.

Suggested Citation

  • Peter Fisher & Alan Peters, 1997. "Measuring Tax and Incentive Competition: What Is the Best Yardstick?," Regional Studies, Taylor & Francis Journals, vol. 31(8), pages 751-764.
  • Handle: RePEc:taf:regstd:v:31:y:1997:i:8:p:751-764
    DOI: 10.1080/713693398
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    Cited by:

    1. Richard Funderburg & Timothy J. Bartik & Alan H. Peters & Peter S. Fisher, 2013. "The Impact Of Marginal Business Taxes On State Manufacturing," Journal of Regional Science, Wiley Blackwell, vol. 53(4), pages 557-582, October.

    More about this item

    Keywords

    Taxes; Incentives; Hypothetical Firm; Measurement;

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