scholarly journals Testing for Vertical Fiscal Externalities

2004 ◽  
Vol 11 (3) ◽  
pp. 243-263 ◽  
Author(s):  
Linda Andersson ◽  
Thomas Aronsson ◽  
Magnus Wikström
Keyword(s):  
Fiscal Externalities

Fiscal Externalities and Optimal Taxation in an Economic Community [with Comments]

2005 ◽  
Vol 2005 (1) ◽  
pp. 207-259
Author(s):  
Marianne Baxter ◽  
Robert G. King ◽  
Pierpaolo Benigno ◽  
Francesco Giavazzi
Keyword(s):  
Optimal Taxation ◽  
Economic Community ◽  
Fiscal Externalities

scholarly journals Vertical Fiscal Externalities and the Environment

2014 ◽  
Author(s):  
Christoph BBhringer ◽  
Nicholas Rivers ◽  
Hidemichi Yonezawa
Keyword(s):  
Fiscal Externalities

Do State Sales Taxes Crowd Out Local Option Sales Taxes?

2018 ◽  
Vol 18 (3) ◽  
Author(s):  
Gregory S. Burge ◽  
Cynthia L. Rogers
Keyword(s):  
Local Governments ◽  
Sales Tax ◽  
Tax Rates ◽  
Tax Base ◽  
Tax Rate ◽  
Sales Taxes ◽  
Fiscal Externalities ◽  
Crowd Out ◽  
State And Local ◽  
Fiscal Spillovers

Abstract Currently, sales taxes are imposed at both the state and local levels in 37 US states. In these environments, vertical tax competition occurs as governments share a common sales tax base, and local jurisdictions have autonomy over sales tax rates. As cash-strapped states look to sales taxes for additional revenues, local governments may worry about potentially adverse revenue impacts, as consumers react to combined tax rate increases. This study examines state-municipal and county-municipal fiscal spillovers using an empirical approach that accounts for endogenous tax policy leadership and voter tax fatigue. Employing comprehensive longitudinal data from Oklahoma, we find that state tax hikes significantly crowd out future rate increases for the large group of jurisdictions that are designated as followers. Leader jurisdictions are not found to display crowd-out tendencies, a result that is consistent with recent work suggesting that leaders may be less influenced by vertical fiscal externalities than other jurisdictions.

Vertical Fiscal Externalities and Federal Tax-Transfers under Variable Factor Supplies

2019 ◽  
Author(s):  
Nikos Tsakiris ◽  
Panos Hatzipanayotou ◽  
Michael S Michael
Keyword(s):  
Federal Government ◽  
State Governments ◽  
International Mobility ◽  
Jel Codes ◽  
Fiscal Externalities ◽  
Public Consumption ◽  
Variable Factor ◽  
Capital Tax ◽  
Labor Taxes ◽  
Endogenous Labor

Abstract Within a model of variable supply of capital due to international mobility and variable labor supply due to endogenous labor-leisure choice, we revisit the issues of vertical fiscal externalities, and of federal tax-transfers. Capital and labor taxes by federal and state governments finance the provision of federal and of state public consumption goods. When capital and labor are substitutes in production, we show that (i) the state’s optimal policy calls for capital and labor taxes, (ii) the vertical fiscal externality can be reversed from negative, implying inefficiently high noncooperative capital taxes, to positive, implying inefficiently low noncooperative capital taxes, and (iii) under centralized leadership the federal government replicates the second best optimum with a capital tax, and possibly, top-down transfers. (JEL codes: F18, F21, H21).

The Myth of Fiscal Externalities

1999 ◽  
Vol 27 (1) ◽  
pp. 3-18 ◽  
Author(s):  
Edgar K. Browning
Keyword(s):  
Fiscal Externalities

Fiscal externalities in a three-tier structure of government

2014 ◽  
Vol 41 (6) ◽  
pp. 863-880
Author(s):  
Andreas Kappeler
Keyword(s):  
Fiscal Federalism ◽  
Design Methodology ◽  
Strategic Behavior ◽  
Federal System ◽  
Investment Incentives ◽  
Content Type ◽  
Regional Investment ◽  
Fiscal Externalities ◽  
The Usa ◽  
The Eu

Purpose – Federal systems are often more sophisticated than assumed in the literature. In many cases, at least three tiers of government are involved in federal decision making. The purpose of this paper is to cast some light on this increasingly important issue in fiscal federalism. Design/methodology/approach – In a model with three tiers of government, the author analyzes corrective policies in the presence of fiscal externalities generated by federal redistribution. Findings – The author identifies an additional qualitative incentive effect, particularly for intermediate governments. They behave strategically to attract additional redistribution funds from outside, though still using corrective policies to provide investment incentives toward their own regions. The results also suggest that differently from the USA the federal system of the EU may lead to inefficiently low regional investment. Originality/value – The presented model is a first step toward analyzing strategic behavior and the effect of corrective policies in more complicated federal set ups with three tiers of government involved. This is relevant for federal structures such as Germany or the USA, as well as for government interactions at the international level.

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