Tax competition, excludable public goods, and user charges

Bernd Huber and Marco Runkel ()

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: This paper provides an explanation for the increasing reliance on revenue from user charges on excludable public goods. We develop a model with many identical countries. The government of each country imposes a source-based tax on capital and supplies an excludable public good to heterogeneous households. Without tax competition, the price on the public good is zero. Tax competition induces each country to choose a positive price. The reliance on user charges turns out to be increasing in the intensity of tax competition measured by the number of countries. A coordinated decrease in user charges is shown to raise welfare in all countries.

Date: 2009
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Citations: View citations in EconPapers (6)

Published in International Tax and Public Finance 3 16(2009): pp. 321-336

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Related works:
Journal Article: Tax competition, excludable public goods, and user charges (2009)
Working Paper: Tax Competition, Excludable Public Goods and User Charges (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:19389

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