EconPapers    
Economics at your fingertips  
 

The Tax Gradient: Spatial Aspects of Fiscal Competition

David Agrawal ()

No 5292, CESifo Working Paper Series from CESifo Group Munich

Abstract: State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low-state-tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all local sales tax rates, local tax rates on the low-tax side of the border are 1.25 percentage points higher, reducing the differential in state tax rates by over three-quarters. A ten minute increase in driving time from the nearest high-tax state lowers a border town’s local tax rate by 6%.

Keywords: sales taxes; cross-border shopping; tax competition; fiscal federalism (search for similar items in EconPapers)
JEL-codes: H20 H25 H73 H77 R51 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (26) Track citations by RSS feed

Downloads: (external link)
http://www.cesifo-group.de/DocDL/cesifo1_wp5292.pdf (application/pdf)

Related works:
Journal Article: The Tax Gradient: Spatial Aspects of Fiscal Competition (2015) 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:ces:ceswps:_5292

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2018-12-12
Handle: RePEc:ces:ceswps:_5292