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Une analyse spatiale de la réaction des impôts provinciaux sur les sociétés: résultats pour le Canada.
Author(s) -
Karkalakos Sotiris,
Kotsogiannis Christos
Publication year - 2007
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1365-2966.2007.00431.x
Subject(s) - interdependence , economics , income tax , robustness (evolution) , public economics , state income tax , government (linguistics) , tax reform , macroeconomics , political science , biochemistry , chemistry , linguistics , philosophy , gene , law
. Using a model of interdependent tax choices, and accounting for equalization entitlements and general transfers, this paper estimates – making use of a spatial econometric framework – corporate income tax‐setting functions for all Canadian provincial governments. The results show that there is a statistically significant positive fiscal interaction among a subset of provinces and between all provinces and the federal government. Provincial corporate income taxes are also found to be negatively related to equalization entitlements, general federal transfers, and the federal corporate income tax. A robustness check on the fiscal relationship between Ontario and Quebec verifies the existence of significant bi‐directional fiscal interdependencies. The paper also introduces U.S state corporate income taxes as covariates and examines their interaction with Canadian provinces.