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Tax Federalism and Cooperative Games: Value Approach

Emilio Calvo ()

No 218, Discussion Papers in Economic Behaviour from University of Valencia, ERI-CES

Abstract: We model the problem of how to distribute the public spending between the different regions of a country once all taxes are collected as a cooperative game in coalitional form. A tax game is built, specifying how much tax is collected in every region and coalition of regions in the country under secession. In this paper we propose two tax rules: the balanced tax rule, and the redistributive balanced tax rule. Both rules have the property of being stable for every tax problem, as they belong to the core of the tax game. The Spanish case is considered as example. We compare their redistributive behavior with the present Spanish financial system, with the population egalitarian, and with the optimistic secession tax rules.

Keywords: fiscal federalism; fiscal stability; secessionism; coalitional (search for similar items in EconPapers)
JEL-codes: H72 H77 C71 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-pbe and nep-pub
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