Arbeitspapier

Federal tax-transfer policy and intergovernmental pre-commitment

Federal and state governments often differ in the capacity to pre-commit to expenditure and tax policy. Whether the implied sequence of public decisions has any efficiency implications is the subject of this paper. We resort to a setting which contrary to most of the literature does not exhibit a perfect tax-base overlap. We show that a federal government's pre-commitment capacity is welfare-improving. Efficiency, however, does not improve over all decision margins. The welfare-increasing policy entails a more distorted level of public consumption. Moreover, welfare may also improve if local governments are able to pre-commit towards the upper level. The rationale is that although federal transfers are formally unconditional they nevertheless entail a tax-price effect; thereby potentially counteracting incentives to engage in a “race to the bottom” in fiscal competition among local governments.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 2054

Klassifikation
Wirtschaft
State and Local Taxation, Subsidies, and Revenue
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Structure and Scope of Government: General
Thema
Finanzföderalismus
Finanzausgleich
Steuerpolitik
Steuerwettbewerb
Agency Theory
Theorie

Ereignis
Geistige Schöpfung
(wer)
Koethenbuerger, Marko
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2007

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Koethenbuerger, Marko
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2007

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