Intra-Jurisdictional Tax Competition
University of Pennsylvania Law School; Erasmus School of Law; PERC - Property and Environment Research Center
University of Minnesota - Law School; University of Bologna
Constitutional Political Economy, Vol. 16, No. 4, pp. 387-395, December 2005
George Mason Law & Economics Research Paper No. 03-16
While much has been written about inter-jurisdictional competition for tax revenues, especially concerning the choice between harmonization and competition, the literature has largely ignored intra-jurisdiction issues. The few articles examining this issue focus on how lower level governmental entities react to the tax decisions of a national government. However, in some instances, multiple co-equal taxing authorities might share the same base. These bodies face a dilemma over whether to harmonize their policies or to compete. We present a simple model of revenue maximizing tax authorities and derive the conditions under which harmonization dominates competition.
Number of Pages in PDF File: 16
Keywords: Tax, Federalism, Harmonization, Rent-Seeking, Commons
JEL Classification: H20, H77
Date posted: April 4, 2003
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