Business tax interactions among local governments: an empirical analysis of the French case

Matthieu Leprince (), Thierry Madiès and Sonia Paty
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Thierry Madiès: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: We study the business tax ("taxe professionnelle") behavior of the intermediate level (department) of local government in France and test in the same model the two hypotheses that department tax rates are explained by upper tier (region) tax rates and by tax rates chosen by other departments. We first reject the hypothesis of tax interactions between departments and regions, the two upper levels of local governments. Second, we provide evidence that business tax interactions among departments are significant. Including the vertical dimension in the estimated model does not lead to a decrease in the horizontal tax interactions parameter, nor to its nonsignificance.

Keywords: business tax; tax interactions; local governments; France (search for similar items in EconPapers)
Date: 2007-08
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Citations: View citations in EconPapers (25)

Published in Journal of Regional Science, 2007, 47 (3), pp.603-621. ⟨10.1111/j.1467-9787.2007.00522.x⟩

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Journal Article: BUSINESS TAX INTERACTIONS AMONG LOCAL GOVERNMENTS: AN EMPIRICAL ANALYSIS OF THE FRENCH CASE (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00257446

DOI: 10.1111/j.1467-9787.2007.00522.x

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