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Optimal federal capital income taxation

Optimal federal capital income taxation
Optimal federal capital income taxation
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 inefficiencies 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.
9820
University of Southampton
Kotsogiannis, C.
1dcb0a72-64d9-4c58-a791-3032698856ff
Makris, M.
966df0dc-9caf-409e-9cbe-f2a800cdffda
Kotsogiannis, C.
1dcb0a72-64d9-4c58-a791-3032698856ff
Makris, M.
966df0dc-9caf-409e-9cbe-f2a800cdffda

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

Record type: Monograph (Discussion Paper)

Abstract

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 inefficiencies 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.

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More information

Published date: January 1998

Identifiers

Local EPrints ID: 33172
URI: http://eprints.soton.ac.uk/id/eprint/33172
PURE UUID: 6b22a11e-fde0-4847-8594-0699b92d8d0c

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Date deposited: 25 Jan 2008
Last modified: 11 Dec 2021 15:19

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Contributors

Author: C. Kotsogiannis
Author: M. Makris

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