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Local Taxation and Tax Base Mobility: Evidence from the French business tax reform

Tidiane Ly () and Sonia Paty

Working Papers from HAL

Abstract: This paper investigates the impact of tax base mobility on local taxation. We first develop a theoretical model in order to examine the connection between local business property taxation and tax base mobility within a metropolitan area. We find that decreasing capital intensity in the tax base increases the business property tax rates unambiguously. We then test this result using a French reform, which changes the composition of the main local business tax base in 2010. Estimations using Difference-inDifferences show that the reduction in the mobility of the tax base indeed results in higher business property tax rates. Housing tax rates were not affected by the reform.

Keywords: Local taxation; Tax base mobility; Tax competition; Difference-in-Differences (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-acc, nep-pbe, nep-pub and nep-ure
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01812611v2
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