EconPapers    
Economics at your fingertips  
 

Agglomeration, tax competition, and fiscal equalization

Matthias Wrede ()

International Tax and Public Finance, 2014, vol. 21, issue 6, 1012-1027

Abstract: This paper analyzes the impact of fiscal equalization on asymmetric tax competition when positive agglomeration externalities are present. It uses a model focusing on the strategic reason for capital taxes to demonstrate that per capita fiscal capacity equalization improves the spatial allocation of capital provided a sufficiently rich (marginally) larger region and sufficiently strong agglomeration externalities. If tax revenue is used to finance public goods, per capita fiscal capacity equalization generally cannot simultaneously eliminate public good inefficiency and spatial inefficiency. However, the achievement of full efficiency for ex ante identical regions requires excessive (full) equalization in the presence (absence) of agglomeration externalities. Copyright Springer Science+Business Media New York 2014

Keywords: Agglomeration; Tax competition; Fiscal equalization; R12; H71; H73 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s10797-013-9295-7 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Agglomeration, tax competition, and fiscal equalization (2009) Downloads
Working Paper: Agglomeration, tax competition, and fiscal equalization (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:21:y:2014:i:6:p:1012-1027

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-01-21
Handle: RePEc:kap:itaxpf:v:21:y:2014:i:6:p:1012-1027