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Les incitations fiscales dans le fédéralisme fiscal: une perspective intégrée .
Author(s) -
Kelders Christian,
Koethenbuerger Marko
Publication year - 2010
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.1540-5982.2010.01589.x
Subject(s) - fiscal federalism , incentive , economics , revenue sharing , public economics , tax revenue , fiscal imbalance , fiscal union , government (linguistics) , revenue , perspective (graphical) , fiscal policy , federalism , economic policy , macroeconomics , decentralization , finance , political science , microeconomics , market economy , linguistics , philosophy , artificial intelligence , politics , computer science , law
Models of fiscal federalism rarely account for the efficiency implications of intergovernmental fiscal ties for federal tax policy. This paper shows that fiscal institutions such that federal tax deductibility, vertical revenue‐sharing, and fiscal equalization (being common features of existing federations) encourage local taxation, but may discourage federal taxation. Furthermore, the structure of public spending is skewed towards local spending. We also show that, when considering Leviathan governments, fiscal institutions reduce confiscatory taxation by the federal government. The result is contrary to the Cartelization Hypothesis (Brennan and Buchanan 1980). Finally, we characterize the efficient design of intergovernmental fiscal ties.