Fiscal Equalization, Tax Salience, and Tax Competition
VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy from Verein für Socialpolitik / German Economic Association
This paper analyzes the efficiency consequences of local revenue policies if jurisdictions try to attenuate the pressures of inter-regional competition for mobile factors by substituting attention-grabbing tax instruments that spotlight an additional tax burden with rather inconspicuous ones. We show that the substitution of tax instruments with the view to reduce the perceived tax price may suppress the under-exploitation of tax bases that typically goes along with fiscal equalization.
JEL-codes: H22 H30 H77 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-ure
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Working Paper: Fiscal Equalization, Tax Salience, and Tax Competition (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc14:100622
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