Fiscal Equalization, Tax Salience, and Tax Competition

Arbeitspapier

Jurisdictions that engage in inter-regional tax competition usually try to attenuate competitive pressures by substituting salient tax instruments with hidden ones. On this effect, we investigate the efficiency consequences of inter-regional tax competition and fiscal equalization in a federal system when taxpayers fail to optimally react on shrouded attributes of local tax policy. If the statuary tax rate is a relatively salient instrument and taxpayers pay low attention to the quality and the frequency of tax enforcement, the underlying substitution of tax instruments with the aim of reducing the perceived tax price may suppress the under-exploitation of tax bases that is typically triggered by fiscal equalization.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH Discussion Papers ; No. 3/2014

Classification and Topics

• Classification: Wirtschaft ; Intergovernmental Relations; Federalism; Secession ; Taxation and Subsidies: Incidence ; Fiscal Policies and Behavior of Economic Agents: General
• Subject: fiscal equalization ; tax salience ; tax competition ; fiscal federalism ; tax-cutcum-base-broadening policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Altemeyer-Bartscher, Martin
• Event: Veröffentlichung
• (who): Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
• (where): Halle (Saale)
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/95948
• URN: urn:nbn:de:gbv:3:2-28829
• Last update: 10.03.2025, 11:44 AM CET