Tax Competition and Fiscal Equalization

Marko Köthenbürger ()
Authors registered in the RePEc Author Service: Marko Koethenbuerger

International Tax and Public Finance, 2002, vol. 9, issue 4, 408 pages

Abstract: This paper analyzes the relation between tax competition and fiscal equalization. In particular, it asks the question whether fiscal equalization schemes can mitigate inefficient tax competition. Two transfer schemes are considered: tax revenue and tax base equalization schemes. The paper shows that equalizing transfers may internalize fiscal externalities. In particular, in a small open economy tax base equalization yields efficient tax rates. Thus, transfer mechanisms with an explicit redistributive character do not always impair efficiency. Copyright Kluwer Academic Publishers 2002

Keywords: capital tax competition; fiscal equalization; federal system (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (70)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:9:y:2002:i:4:p:391-408

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DOI: 10.1023/A:1016511918510

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