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Title: Fiscal equalization under political pressures
Author: Esteller Moré, Alejandro
Galmarini, Umberto
Rizzo, Leonzio
Keywords: Política fiscal
Distribució (Teoria de la probabilitat)
Fiscal policy
Distribution (Probability theory)
Issue Date: 2015
Publisher: Institut d’Economia de Barcelona
Series/Report no: [WP E-IEB15/21]
Abstract: We examine the design of fiscal equalization transfers aimed at interregional redistribution in a setting in which special interest groups distort the fiscal policies of local governments. Equity always calls for tax-base equalization while efficiency calls for tax-base equalization of fiscal capacities backed by strong lobby groups and for taxrevenue equalization of those backed by weak lobby groups. Hence, it is optimal to rely only on tax-base equalization if the special interest groups are similar in terms of lobbying power, whereas a mixed system is optimal if they are highly heterogeneous. Tax competition reinforces the role of tax-base, while tax exporting that of tax-revenue, fiscal equalization.
Note: Reproducció del document publicat a:
It is part of: IEB Working Paper 2015/21
Appears in Collections:IEB (Institut d’Economia de Barcelona) – Working Papers

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