Arbeitspapier
Raising taxes through equalization
A simple theory suggests that a common form of federal horizontal equalization grants should cause subnational governments to levy higher tax rates, distorting local tax bases and so increasing federal transfers. To test this, I examine Canadian provincial tax policies in the 1972-2002 period. Consistent with the theory, provinces respond to expansions of equalization transfers by increasing their own tax rates. I estimate that on average tax rates in grant-receiving provinces were substantially and significantly higher as a consequence of the transfer formula.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 1926
- Classification
-
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
- Subject
-
Ländersteuer
Steuertarif
Steuerpolitik
Finanzausgleich
Finanzföderalismus
Schätzung
Kanada
- Event
-
Geistige Schöpfung
- (who)
-
Smart, Michael
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2007
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Smart, Michael
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2007
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