Bulletin n. 3/2011 | ||
February 2012 | ||
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Vertical tax competition and consumption externalities in a federation with lobbying | ||
in Journal of Public Economics , Volume 96, Issues 3-4, , 2012 , 295–305 | ||
Tax-base sharing by two layers of government can be an efficient tax regime. Tax policy swayed by lobbying can be Pareto superior to lobby-free tax policy. Tax-base sharing is efficient if the externality linked to the taxed good is large. The dispersion of taxing powers may reduce the influence of pressure groups. Leviathan politicians are better off when facing lobby groups with opposed interests. | ||