IDEAS home Printed from https://ideas.repec.org/p/ieb/wpaper/2011-3-doc2011-4.html
   My bibliography  Save this paper

On the determinants of local tax rates: new evidence from Spain

Author

Listed:
  • Francisco J. Delgado

    () (University of Oviedo)

  • Santiago Lago-Peñas

    () (REDE, IEB and University of Vigo)

  • Matías Mayor

    () (University of Oviedo)

Abstract

This paper studies the determinants of local tax rates. For the two main local taxes in Spain - the property tax and the motor vehicle tax - we test the existence of tax mimicking, yardstick competition and political trends in a sample of 2,713 municipalities. Using different spatial models, the results support the hypothesis of tax mimicking, with coefficients over 0.40. We also show the relevance of political variables such as the ideology of the incumbents and political fragmentation. The fact that incumbents with weaker political support display stronger mimicking behaviour is interpreted as evidence in favour of yardstick competition. Finally, we find incumbents mimic neighbouring municipalities ruled by the same political party, confirming the political trends hypothesis.

Suggested Citation

  • Francisco J. Delgado & Santiago Lago-Peñas & Matías Mayor, 2011. "On the determinants of local tax rates: new evidence from Spain," Working Papers 2011/4, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2011/3/doc2011-4
    as

    Download full text from publisher

    File URL: http://www.ieb.ub.edu/aplicacio/fitxers/2011/3/Doc2011-4.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Padovano, Fabio & Petrarca, Ilaria, 2014. "Are the responsibility and yardstick competition hypotheses mutually consistent?," European Journal of Political Economy, Elsevier, vol. 34(C), pages 459-477.
    2. Roland Füss & Oliver Lerbs, 2017. "Homeowner Effect and Strategic Interaction in Local Property Taxation," ERES eres2017_149, European Real Estate Society (ERES).
    3. repec:cuf:journl:y:2017:v:18:i:1:valles-gimenez is not listed on IDEAS
    4. Marcel Gérard & Laurent van Malderen, 2012. "Tax Interaction among Walloon Municipalities: Is there Room for Yardstick Competition, Intellectual Trend and Partisan Monopoly Effect?," CESifo Working Paper Series 4025, CESifo Group Munich.
    5. Füss, Roland & Lerbs, Oliver, 2017. "Do local governments tax homeowner communities differently?," ZEW Discussion Papers 17-036, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. repec:cuf:journl:y:2017:v:18:i:2:valles-gimenez is not listed on IDEAS
    7. repec:gam:jsusta:v:10:y:2018:i:1:p:45-:d:125112 is not listed on IDEAS
    8. Vallés-Giménez, Jaime & Zárate-Marco, Anabel, 2017. "Fungibility and bandwagon effects of capital transfers in a federal context," Economics Discussion Papers 2017-46, Kiel Institute for the World Economy (IfW).
    9. Laurent Van Malderen & Marcel Gerard, 2013. "Testing yardstick competition through a vote-function: evidence from the Walloon municipalities," Economics and Business Letters, Oviedo University Press, vol. 2(4), pages 206-214.
    10. repec:hpe:journl:y:2016:v:219:i:4:p:161-188 is not listed on IDEAS

    More about this item

    Keywords

    Local taxation; tax mimicking; yardstick competition; political trends;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ieb:wpaper:2011/3/doc2011-4. 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: (). General contact details of provider: http://edirc.repec.org/data/iebubes.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.