General Income Taxation, Public Goods and Decentralized Leadership

Thomas Aronsson ()
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Thomas Aronsson: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 715, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: This paper concerns redistribution and public good provision under asymmetric information, which are here ingredients of a policy-problem facing each member state (nation) of an economic federation with decentralized leadership. Each member state is assumed to have its own redistributive policy and pattern of public consumption, whereas the federal level redistributes (ex-post) between the member states. The results show how and why federal ex-post redistribution may modify the use of income taxation and public good provision at the national level, relative to the policy outcome in the absence of a federal government, as well as how the national policy incentives depend on whether or not the federal government uses distortionary taxes.

Keywords: Income taxation; redistribution; public goods; fiscal federalism; decentralized leadership (search for similar items in EconPapers)
JEL-codes: D31 D60 D82 H21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 2007-08-31
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