The role of direct taxes in fiscal decentralization
The aim of the paper is to review the economic theory of tax assignment across levels of government and the international experience in the use of direct taxes – personal income taxes and taxes on profits and on business value added – for fiscal decentralization. We highlight that as for other options of local taxation there are merits but also drawbacks in the use of direct taxes as a source of financing for sub-central governments and so the final choice about their use or not is a matter of judgment and depends on the political priority to be attached to different objectives, such as efficiency, equity, accountability, tax competition, administrative feasibility and revenue adequacy.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: University of Genoa c/o Marcello Montefiori via Vivaldi, 5 16126 Genova ITALY|
Fax: +39 010 209 5223
Web page: http://www.dep.unige.it/
More information through EDIRC
References listed on IDEAS
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.:
- Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
- 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.
- Timothy Besley & Anne Case, 1992. "Incumbent Behavior: Vote Seeking, Tax Setting and Yardstick Competition," NBER Working Papers 4041, National Bureau of Economic Research, Inc.
- David King & Yue Ma, 2000. "Decentralization and macroeconomic performance," Applied Economics Letters, Taylor & Francis Journals, vol. 7(1), pages 11-14.
- Isabelle Joumard & Wim Suyker, 2002. "Options for Reforming the Finnish Tax System," OECD Economics Department Working Papers 319, OECD Publishing.
- William H. Oakland & William A. Testa, 1996. "State-local business taxation and the benefits principle," Economic Perspectives, Federal Reserve Bank of Chicago, issue Jan, pages 2-19.
- Timothy J. Besley & Harvey S. Rosen, 1998.
"Sales Taxes and Prices: An Empirical Analysis,"
NBER Working Papers
6667, National Bureau of Economic Research, Inc.
- Michael Keen, 1998. "Vertical Tax Externalities in the Theory of Fiscal Federalism," IMF Staff Papers, Palgrave Macmillan, vol. 45(3), pages 454-485, September.
- Schmidheiny, Kurt, 2006.
"Income segregation and local progressive taxation: Empirical evidence from Switzerland,"
Journal of Public Economics,
Elsevier, vol. 90(3), pages 429-458, February.
- Kurt Schmidheiny, 2004. "Income Segregation and Local Progressive Taxation: Empirical Evidence from Switzerland," CESifo Working Paper Series 1313, CESifo Group Munich.
- Kurt Schmidheiny, 2003. "Income Segregation and Local Progressive Taxation: Empirical Evidence from Switzerland," Diskussionsschriften dp0311, Universitaet Bern, Departement Volkswirtschaft.
- Schmidheiny, Kurt, 2003. "Income Segregation and Local Progressive Taxation: Empirical Evidence from Switzerland," HWWA Discussion Papers 248, Hamburg Institute of International Economics (HWWA).
- Robert Tannenwald, 2001. "Are state and local revenue systems becoming obsolete?," New England Economic Review, Federal Reserve Bank of Boston, pages 27-43.
- Isabelle Joumard & Per Mathis Kongsrud, 2003.
"Fiscal Relations across Government Levels,"
OECD Economic Studies,
OECD Publishing, vol. 2003(1), pages 155-229.
- Goodspeed, Timothy J., 1989. "A re-examination of the use of ability to pay taxes by local governments," Journal of Public Economics, Elsevier, vol. 38(3), pages 319-342, April.
- Feldstein, Martin & Wrobel, Marian Vaillant, 1998.
"Can state taxes redistribute income?,"
Journal of Public Economics,
Elsevier, vol. 68(3), pages 369-396, June.
- Goodspeed, Timothy J., 2000. "Tax structure in a federation," Journal of Public Economics, Elsevier, vol. 75(3), pages 493-506, March.
- Isabelle Joumard, 2005. "Getting the Most Out of Public Sector Decentralisation in Mexico," OECD Economics Department Working Papers 453, OECD Publishing.
- Jon Bakija & Joel Slemrod, 2004.
"Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns,"
Department of Economics Working Papers
2004-12, Department of Economics, Williams College.
- Jon Bakija & Joel Slemrod, 2004. "Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns," NBER Working Papers 10645, National Bureau of Economic Research, Inc.
- Goodspeed, Timothy J., 1995. "Local income taxation: An externality, Pigouvian solution, and public policies," Regional Science and Urban Economics, Elsevier, vol. 25(3), pages 279-296, June.
- Charles E. McLure, Jr., 1983. "Defining a Unitary Business: An Economist's View," NBER Working Papers 1125, National Bureau of Economic Research, Inc.
- Tannenwald, Robert, 2002. "Are State and Local Revenue Systems becoming Obsolete?," National Tax Journal, National Tax Association, vol. 55(3), pages 467-89, September.
- Scott, Charles E. & Triest, Robert K., 1993. "The Relationship Between Federal and State Individual Income Tax Progressivity," National Tax Journal, National Tax Association, vol. 46(2), pages 95-108, June.
- Masayoshi Hayashi & Robin Boadway, 2001. "An empirical analysis of intergovernmental tax interaction: the case of business income taxes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 481-503, May.
- Isabelle Joumard & Claude Giorno, 2005. "Getting the Most Out of Public Sector Decentralisation in Spain," OECD Economics Department Working Papers 436, OECD Publishing.
- Charles E. McLure, Jr. & Jorge Martinez-Vazquez, 1998. "Intergovernmental Fiscal Relations in Vietnam," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9802, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- McLure, Charles E. Jr., 2001. "The Tax Assignment Problem: Ruminations on How Theory and Practice Depend on History," National Tax Journal, National Tax Association, vol. 54(n. 2), pages 339-64, June.
- Isabelle Joumard & Tadashi Yokoyama, 2005. "Getting the Most Out of Public Sector Decentralisation in Japan," OECD Economics Department Working Papers 416, OECD Publishing.
When requesting a correction, please mention this item's handle: RePEc:gea:wpaper:6/2012. 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: (Marcello Montefiori)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.