Title:
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Fiscal equalization under political pressures
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Author:
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Esteller Moré, Alejandro; Galmarini, Umberto; Rizzo, Leonzio
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Notes:
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We examine the design of fiscal equalization transfers aimed at interregional redistribution in a setting in which special interest groups distort the fiscal policies of local governments. Equity always calls for tax-base equalization while efficiency calls for tax-base equalization of fiscal capacities backed by strong lobby groups and for taxrevenue equalization of those backed by weak lobby groups. Hence, it is optimal to rely only on tax-base equalization if the special interest groups are similar in terms of lobbying power, whereas a mixed system is optimal if they are highly heterogeneous. Tax competition reinforces the role of tax-base, while tax exporting that of tax-revenue, fiscal equalization. |
Subject(s):
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-Política fiscal -Impostos -Distribució (Teoria de la probabilitat) -Fiscal policy -Taxation -Distribution (Probability theory) |
Rights:
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cc-by-nc-nd, (c) Esteller Moré et al., 2015
http://creativecommons.org/licenses/by-nc-nd/3.0/es/
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Document type:
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Working Paper |
Published by:
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Institut d’Economia de Barcelona
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