Abstract

https://ssrn.com/abstract=2357111
 


 



Tax Competition and Federal Equalization Schemes with Decentralized Leadership


Emilson Caputo Delfino Silva


University of Alberta - Department of Marketing, Business Economics & Law

November 18, 2013

University of Alberta School of Business Research Paper No. 2013‐1318

Abstract:     
In a federation featuring decentralized leadership, regional governments compete by setting capital taxes in anticipation of the central government's fiscal-equalization and income-redistribution policies. As a benchmark, it is first demonstrated that the constrained socially optimal allocation satisfies the Pareto efficient conditions; therefore, it may be first best. It is also shown that the subgame perfect equilibrium for the decentralized leadership game is socially optimal. The anticipation of equalization of marginal utilities of public consumption and equalization of marginal utilities of private consumption provides regional governments with correct incentives in the setting of capital taxes.

Number of Pages in PDF File: 19

Keywords: fiscal equalization, income redistribution, capital tax competition, decentralized leadership

JEL Classification: D6, H3, H4, H7


Open PDF in Browser Download This Paper

Date posted: November 19, 2013  

Suggested Citation

Delfino Silva, Emilson Caputo, Tax Competition and Federal Equalization Schemes with Decentralized Leadership (November 18, 2013). University of Alberta School of Business Research Paper No. 2013‐1318. Available at SSRN: https://ssrn.com/abstract=2357111 or http://dx.doi.org/10.2139/ssrn.2357111

Contact Information

Emilson Caputo Delfino Silva (Contact Author)
University of Alberta - Department of Marketing, Business Economics & Law ( email )
Edmonton, Alberta T6G 2R6
Canada

Feedback to SSRN


Paper statistics
Abstract Views: 169
Downloads: 36