Sub-metropolitan tax competition with household and capital mobility

Tidiane Ly

International Tax and Public Finance, 2018, vol. 25, issue 5, No 2, 1129-1169

Abstract: Abstract This paper investigates the efficiency properties of tax competition between sub-metropolitan jurisdictions when capital, residents and workers are mobile, and both households and firms compete for local land markets. We analyze two decentralized equilibria: (1) With a local tax on residents and two separate local taxes on capital and land inputs, efficiency is achieved and the existence of a marginal fiscal cost due to residents’ mobility is revealed; (2) Combination of the taxes on capital and land inputs into a single business property tax leads local authorities to charge inefficiently high taxation on capital. We show that capital mobility induces a reduction in the business land taxation and local public inputs are used to offset the distorting effects of the property tax, accounting for the distorting impact of workers’ mobility.

Keywords: Tax competition; Public goods; Public inputs; Household mobility; Capital mobility (search for similar items in EconPapers)
JEL-codes: H71 H72 R50 R51 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s10797-018-9490-7 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Sub-metropolitan Tax Competition with Household and Capital Mobility (2016)
Working Paper: Sub-metropolitan Tax Competition with Household and Capital Mobility (2016)
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:25:y:2018:i:5:d:10.1007_s10797-018-9490-7

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

DOI: 10.1007/s10797-018-9490-7

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 () and Springer Nature Abstracting and Indexing ().