Ad-valorem taxation and the balance of externalities in federations

Ourania Karakosta

Economics Letters, 2010, vol. 107, issue 1, 71-73

Abstract: This paper shows that--in contrast to unit taxation--horizontal and vertical externalities that exist in federations are ambiguous in sign when taxation is ad-valorem. Their balance, however, depends on the marginal valuation of lower-level government and federal public goods.

Keywords: Horizontal/vertical; externalities; Tax; competition; Fiscal; federalism (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:107:y:2010:i:1:p:71-73

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