Vertical Tax Externalities in the Theory of Fiscal Federalism

Author/Editor:

Michael Keen

Publication Date:

December 1, 1997

Electronic Access:

Free Full Text (PDF file size is 1873 KB).Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Vertical tax externalities between levels of government can occur in federal structures, with responses to the tax policies of one level of government affecting the tax base of the other. Such effects mostly arise when federal and state governments co-occupy the same tax base. This paper examines these externalities by considering their implications for a range of issues in fiscal federalism: the relationship between state and federal tax rates, the equilibrium levels of these taxes, the relevance of experience in federal countries for policy design in international settings, intergovernmental grants, and the assignment of tax powers among levels of government.

Series:

Working Paper No. 97/173

Subject:

Notes:

Also published in Staff Papers, Vol. 45, No. 3, September 1998.

English

Publication Date:

December 1, 1997

ISBN/ISSN:

9781451977318/1018-5941

Stock No:

WPIEA1731997

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

35

Please address any questions about this title to publications@imf.org