Tax decentralisation, the flypaper effect, and growth
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| Formato: | Artículo científico |
| Lenguaje: | en |
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Universidade de Santiago de Compostela
2009
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| _version_ | 1876451099536261120 |
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| author | Ramiro Gil-Serrate |
| author_facet | Ramiro Gil-Serrate |
| contents | Tax decentralisation, the flypaper effect, and growth Ramiro Gil-Serrate Julio López-Laborda Estudios Territoriales economic growth the flypaper effect Tax decentralisation general equilibrium analysis The aim of this paper is to determine a theoretical linkage between tax decentralisation and growth. For this purpose, we consider a two-tier framework of local and federal government originally developed to examine how changes in taxes and transfers affect long-term equilibrium values of consumption and capital stock. In this framework we introduce a tax decentralisation indicator, take into account the existence of the flypaper effect and specify a Cobb-Douglas form for the production technology. As a result we are able to determine the level of tax decentralisation that will maximise the long-term equilibrium per capita income. Such level depends on private and public capital productivities, the tax burden rate in the absence of decentralisation and the intensity of the flypaper effect, as we illustrate using reasonable values of these parameters. The results obtained in this paper could be empirically tested in several economies. 2009 artículo científico 1697-6223 https://www.redalyc.org/articulo.oa?id=50412489002 en http://www.redalyc.org/revista.oa?id=504 Urban Public Economics Review application/pdf Universidade de Santiago de Compostela Urban Public Economics Review (España) Num.10 |
| format | Artículo científico |
| id | redalyc_50412489002 |
| institution | Redalyc |
| language | en |
| publishDate | 2009 |
| publisher | Universidade de Santiago de Compostela |
| spellingShingle | Tax decentralisation, the flypaper effect, and growth Ramiro Gil-Serrate Estudios Territoriales economic growth the flypaper effect Tax decentralisation general equilibrium analysis Tax decentralisation, the flypaper effect, and growth Ramiro Gil-Serrate Julio López-Laborda Estudios Territoriales economic growth the flypaper effect Tax decentralisation general equilibrium analysis The aim of this paper is to determine a theoretical linkage between tax decentralisation and growth. For this purpose, we consider a two-tier framework of local and federal government originally developed to examine how changes in taxes and transfers affect long-term equilibrium values of consumption and capital stock. In this framework we introduce a tax decentralisation indicator, take into account the existence of the flypaper effect and specify a Cobb-Douglas form for the production technology. As a result we are able to determine the level of tax decentralisation that will maximise the long-term equilibrium per capita income. Such level depends on private and public capital productivities, the tax burden rate in the absence of decentralisation and the intensity of the flypaper effect, as we illustrate using reasonable values of these parameters. The results obtained in this paper could be empirically tested in several economies. 2009 artículo científico 1697-6223 https://www.redalyc.org/articulo.oa?id=50412489002 en http://www.redalyc.org/revista.oa?id=504 Urban Public Economics Review application/pdf Universidade de Santiago de Compostela Urban Public Economics Review (España) Num.10 |
| title | Tax decentralisation, the flypaper effect, and growth |
| topic | Estudios Territoriales economic growth the flypaper effect Tax decentralisation general equilibrium analysis |
| url | https://www.redalyc.org/articulo.oa?id=50412489002 |