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Does Fiscal Cooperation Increase Local Tax Rates in Urban Areas?

Listed author(s):
  • Sylvie Charlot
  • Sonia Paty
  • Virginie Piguet

C harlot S., P aty S. and P iguet V. Does fiscal cooperation increase local tax rates in urban areas?, Regional Studies . The main purpose of this paper is to assess the effects of fiscal cooperation on local taxation in a decentralized country using experience in French urban municipalities. A tax-setting model for local business tax is estimated, using spatial and panel econometric techniques, for the period 1993-2003. Controlling for population size, it is found that fiscal cooperation is likely to reduce tax competition and, as a consequence, to increase local business tax rates.

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File URL: http://hdl.handle.net/10.1080/00343404.2013.878798
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Article provided by Taylor & Francis Journals in its journal Regional Studies.

Volume (Year): 49 (2015)
Issue (Month): 10 (October)
Pages: 1706-1721

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Handle: RePEc:taf:regstd:v:49:y:2015:i:10:p:1706-1721
DOI: 10.1080/00343404.2013.878798
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  1. Sylvie Charlot & Sonia Paty, 2010. "Do Agglomeration Forces Strengthen Tax Interactions?," Urban Studies, Urban Studies Journal Limited, vol. 47(5), pages 1099-1116, May.
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  5. Heyndels, Bruno & Vuchelen, Jef, 1998. "Tax Mimicking Among Belgian Municipalities," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 89-101, March.
  6. Sole Olle, Albert, 2003. "Electoral accountability and tax mimicking: the effects of electoral margins, coalition government, and ideology," European Journal of Political Economy, Elsevier, vol. 19(4), pages 685-713, November.
  7. Federico Revelli, 2001. "Spatial patterns in local taxation: tax mimicking or error mimicking?," Applied Economics, Taylor & Francis Journals, vol. 33(9), pages 1101-1107.
  8. Linda Andersson & Thomas Aronsson & Magnus Wikstr–m, 2004. "Testing for Vertical Fiscal Externalities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(3), pages 243-263, 05.
  9. Michael Keen, 1998. "Vertical Tax Externalities in the Theory of Fiscal Federalism," IMF Staff Papers, Palgrave Macmillan, vol. 45(3), pages 454-485, September.
  10. Sam Bucovetsky, 2009. "An index of capital tax competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(6), pages 727-752, December.
  11. Keen, Michael J. & Kotsogiannis, Christos, 2004. "Tax competition in federations and the welfare consequences of decentralization," Journal of Urban Economics, Elsevier, vol. 56(3), pages 397-407, November.
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  15. Wildasin, David E., 1988. "Nash equilibria in models of fiscal competition," Journal of Public Economics, Elsevier, vol. 35(2), pages 229-240, March.
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  17. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(2), pages 269-304, June.
  18. 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.
  19. Devereux, M.P. & Lockwood, B. & Redoano, M., 2007. "Horizontal and vertical indirect tax competition: Theory and some evidence from the USA," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 451-479, April.
  20. Hoyt, William H., 1991. "Property taxation, Nash equilibrium, and market power," Journal of Urban Economics, Elsevier, vol. 30(1), pages 123-131, July.
  21. Revelli, Federico, 2003. "Reaction or interaction? Spatial process identification in multi-tiered government structures," Journal of Urban Economics, Elsevier, vol. 53(1), pages 29-53, January.
  22. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
  23. Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
  24. Heyndels, Bruno & Vuchelen, Jef, 1998. "Tax Mimicking Among Belgian Municipalities," National Tax Journal, National Tax Association, vol. 51(1), pages 89-101, March.
  25. Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
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