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.
University of Southampton
Kotsogiannis, C.
1dcb0a72-64d9-4c58-a791-3032698856ff
Makris, M.
966df0dc-9caf-409e-9cbe-f2a800cdffda
January 1998
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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Published date: January 1998
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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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