Earmarked Taxation for Financing Public Investments Projects

Lisa Grazzini and Alessandro Petretto ()

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: This paper deals with the earmarked taxation employed by local governments for fi nancing public investments projects carried on with some Public-Private Partnerships con figurations. First, we analyse the theoretical pro files of earmarked taxation by using the tax-benefi t approach, and the theory of political competition and accountability. Second, on the ground of the P-P-P literature, we examine the trade-off between fi nancing mechanisms based on public subsidies to the concessionaire fi rm, fi nanced by a earmarked tax, and mechanisms based on users-fees. Then, we discuss cases where the rst solution turns out to be, even partially, preferred. Finally, we consider the potential role of earmarked taxation on the Italian institutional context, emerging from the recent legislation on fi scal federalism and municipalities taxation.

Keywords: Earmarked taxes; cost of public funds; subsidies; public investments (search for similar items in EconPapers)
JEL-codes: H23 H54 H71 R42 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2011
New Economics Papers: this item is included in nep-pbe and nep-pub
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