IDEAS home Printed from https://ideas.repec.org/a/wfo/monber/y2016i6p423-435.html
   My bibliography  Save this article

Tax Autonomy of the Swiss Cantons: A Model for Austria?

Author

Listed:
  • Hans Pitlik

    (WIFO)

  • Christina Seyfried

Abstract

Given the controversial arguments for and against conferring tax autonomy to the Austrian Länder, the experience of other federations are of particular interest. Within Europe, federalism in Switzerland is characterised by a high degree of autonomy of the cantons when it comes to taxing personal income, wealth and business profits, as well as in the provision of public services. Intense tax competition between cantons is moderated by a recently reformed fiscal equalisation system. In spite of criticism of certain details of the regime, Swiss experience with tax autonomy enjoyed by the cantons is generally positive. The decentralised tax system is perceived as a key factor for the country's economic success and high efficiency of the state sector. Nevertheless, tax competition makes for a bias in favour of mobile and affluent taxpayers and enterprises. Moreover, there is a tendency towards segregation: rich and poor taxpayers each congregate in certain cantons and communities. Established tools of direct democracy make a vital contribution to the functioning of tax competition, as they are important in controlling the (competitive) behaviour of cantonal governments and prevent tax competition from being ruinous. Eventually, one has to consider which factors should have more weight in any future redesign of the Austrian federal fiscal regime. Even though direct democracy is no indispensable part of tax autonomy it is still an important element in channelling competition.

Suggested Citation

  • Hans Pitlik & Christina Seyfried, 2016. "Tax Autonomy of the Swiss Cantons: A Model for Austria?," WIFO Monatsberichte (monthly reports), WIFO, vol. 89(6), pages 423-435, June.
  • Handle: RePEc:wfo:monber:y:2016:i:6:p:423-435
    as

    Download full text from publisher

    File URL: https://www.wifo.ac.at/wwa/pubid/58878
    File Function: Abstract
    Download Restriction: Payment required

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Besley, Timothy & Case, Anne, 1995. "Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition," American Economic Review, American Economic Association, vol. 85(1), pages 25-45, March.
    2. Marcus Roller & Kurt Schmidheiny, 2016. "Effective Tax Rates and Effective Progressivity in a Fiscally Decentralized Country," CESifo Working Paper Series 5834, CESifo Group Munich.
    3. Lars P. Feld & Emmanuelle Reulier, 2009. "Strategic Tax Competition in Switzerland: Evidence from a Panel of the Swiss Cantons," German Economic Review, Verein für Socialpolitik, vol. 10, pages 91-114, February.
    4. Philippe Widmer & Peter Zweifel, 2012. "Fiscal Equalization, Tiebout Competition, and Incentives for Efficiency in a Federalist Country," Public Finance Review, , vol. 40(1), pages 3-29, January.
    5. Lars P. Feld & John G. Matsusaka, 2000. "Budget Referendums and Government Spending: Evidence from Swiss," CESifo Working Paper Series 323, CESifo Group Munich.
    6. Marius Brülhart & Mario Jametti & Kurt Schmidheiny, 2012. "Do agglomeration economies reduce the sensitivity of firm location to tax differentials?," Economic Journal, Royal Economic Society, vol. 122(563), pages 1069-1093, September.
    7. Schaltegger, Christoph A. & Somogyi, Frank & Sturm, Jan-Egbert, 2011. "Tax competition and income sorting: Evidence from the Zurich metropolitan area," European Journal of Political Economy, Elsevier, vol. 27(3), pages 455-470, September.
    8. Pommerehne, Werner W., 1978. "Institutional approaches to public expenditure : Empirical evidence from Swiss municipalities," Journal of Public Economics, Elsevier, vol. 9(2), pages 255-280, April.
    9. Joan Costa-Font & Filipe De-Albuquerque & Hristos Doucouliagos, 2015. "Does Inter-jurisdictional Competition Engender a “Race to the Bottom”? A Meta-Regression Analysis," Economics and Politics, Wiley Blackwell, vol. 27(3), pages 488-508, November.
    10. Joan Costa-i-Font & Filipe De-Albuquerque & Hristos Doucouliagos, 2015. "When Does Inter-Jurisdictional Competition Engender a "Race to the Bottom"? A Meta-Regression Analysis," CESifo Working Paper Series 5212, CESifo Group Munich.
    11. Baskaran, Thushyanthan, 2014. "Identifying local tax mimicking with administrative borders and a policy reform," Journal of Public Economics, Elsevier, vol. 118(C), pages 41-51.
    12. Christoph A. Schaltegger & Christoph Gorgas, 2014. "Wie entwickelt sich die Schweizer Mittelschicht?," CREMA Working Paper Series 2014-11, Center for Research in Economics, Management and the Arts (CREMA).
    13. Schaltegger, Christoph A. & Frey, René L., 2001. "Föderalismus zwischen dezentraler Autonomie und zentralstaatlicher Koordination," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 81(3), pages 176-180.
    14. Torgler, Benno, 2005. "Tax morale and direct democracy," European Journal of Political Economy, Elsevier, vol. 21(2), pages 525-531, June.
    15. Kersten Kellermann, 2008. "„Kosten der Kleinheit” und die Föderalismusdebatte in der Schweiz," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(2), pages 196-225, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    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:wfo:monber:y:2016:i:6:p:423-435. 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: (Ilse Schulz). General contact details of provider: http://edirc.repec.org/data/wifooat.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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.