Arbeitspapier
Public Provision and Local Income Tax Competition
We extend the literature on local income tax competition by allowing for inter-jurisdictional spillovers and imperfect rivalry in consumption of a publicly provided good. Comparing decentralized second-best results of a theoretical model with an efficient benchmark, we identify three inefficiencies: (1) imperfect redistribution; (2) inter-community free-riding; and (3) an inefficient allocation of the population. We quantify the relative size of these inefficiencies in a numerical implementation of the theoretical model, which reveals that free-riding rises unambiguously in the level of spillovers, whereas the welfare losses from (1) and (3) depend nonlinearly on the levels of spillovers and rivalry.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 5789
- Classification
-
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Publicly Provided Goods: General
Intergovernmental Relations; Federalism; Secession
Environmental Economics: Government Policy
- Subject
-
publicly provided goods
tax competition
fiscal federalism
decentralization
free-riding
welfare analysis
- Event
-
Geistige Schöpfung
- (who)
-
Kuhlmey, Florian
Hintermann, Beat
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2016
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
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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
- Kuhlmey, Florian
- Hintermann, Beat
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2016
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