Optimal federal capital income taxation

Kotsogiannis, C. and Makris, M. (1998) Optimal federal capital income taxation. Southampton, GB, University of Southampton (Discussion Papers in Economics and Econometrics, 9820).


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Intergovernmental grants are not available to all federations. In this paper, optimal federal tax policies in a multileveled government framework are studied, when the federal authority has no access to intergovernmental grants, and the state governments implement the residence principle. A vertical fiscal externality exists. The federal government, using the available tax instruments, has a dual role; it corrects the inefficiences that arise from the non-cooperative behaviour of the state governments and also redistributes income. It is shown that there may exist a conflict in the redistributional considerations of the federal government and the achievement of production efficiency between the federation and the rest of the world.

Item Type: Monograph (Discussion Paper)
Related URLs:
Subjects: H Social Sciences > HJ Public Finance
J Political Science > JF Political institutions (General)
Divisions : University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33172
Accepted Date and Publication Date:
January 1998Made publicly available
Date Deposited: 25 Jan 2008
Last Modified: 31 Mar 2016 11:59
URI: http://eprints.soton.ac.uk/id/eprint/33172

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