The consequences of overlapping tax bases for redistribution and public spending in a federation

Robin Boadway, Maurice Marchand () and Marianne Vigneault ()
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Maurice Marchand: Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium
Marianne Vigneault: Bishop's University

No 1998003, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Tax and expenditure policies are studied in a federation with imperfectly mobile households. States implement a linear progressive tax and supply a public good. A vertical fiscal externality, reflecting the effect of the state policies on federal revenues, provides an incentive to state taxes to be too progressive. A horizontal fiscal externality causes non-optimal states taxes and expenditures of the migration effect. The federal government implements its own linear progressive tax and makes transfers to the states. The federal government implements its own linear progressive tax and makes transfers to the states. The federal government can nullify both externalities by appropriate fiscal policies, and redistributive taxation can be decentralized to the states

Keywords: fiscal federalism; overlapping tax bases; redistribution policies (search for similar items in EconPapers)
JEL-codes: H2 H7 (search for similar items in EconPapers)
Date: 1998-01-01
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Citations: View citations in EconPapers (110)

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Related works:
Journal Article: The consequences of overlapping tax bases for redistribution and public spending in a federation (1998)
Working Paper: The consequences of overlapping tax bases for redistribution and public spending in a federation (1998)
Working Paper: The Consequences of Overlapping Tax Bases for Redistribution and Public Spending in a Federation (1997)
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