Bulletin n. 1/2012
June 2012
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
  • Tillmann Lisa, Wigger Berthold U.
    Federal TAX Competition – How does the Institutional Structure of a Country change Tax Outcomes?
    in Scottish Journal of Political Economy , May 2012 - Volume 59, Issue 2 ,  2012 ,  162-178
    The interrelations of taxation and federal structure have been extensively analysed from various perspectives. The present paper looks at two competing countries of different institutional structures. It examines how the tax rates set at each level of both countries vary in a given setting, when a federal and a unitary country compete for mobile tax base, or both countries are organised as federations. The paper discusses whether or not tax rates set in every jurisdiction will be too high or too low in equilibrium. The externalities triggered by a tax regime change are analysed and the respective impact on revenues is considered. The results essentially hinge on the relative strategic interaction of tax rates, as well as the elasticity of the tax base with respect to the tax rate.
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