Interjurisdictional tax competition, provision of two local public goods, and environmental policy
Upmann T (1995) Center for Mathematical Economics Working Papers; 238.
Bielefeld: Center for Mathematical Economics.
Diskussionspapier
| Veröffentlicht | Englisch
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Autor*in
Upmann, Thorsten
Abstract / Bemerkung
This paper provides a model that integrates interjurisdictional tax
competition and environmental policy. Each local government supplies two
public goods - that benefit the local industry and the residents
respectively - which are financed through distortionary taxation on
industrial capital and pollutant emissions. In contrast to traditional
theory of tax competition, we find that overprovision of local public
goods may emerge in equilibrium. Since emission taxes serve to finance
public spendings, the supply of public goods and the environmental
quality are closely related. In the special case of a small region that
cannot affect the national after-tax return to capital, we have the
striking new result that in equilibrium two different regimes can occur.
Either we have underprovision of public goods and an inefficiently high
environmental quality, or we have overprovision of public goods and a
too low environmental quality. These inefficiencies persevere as long as
the federal government is not entitled to apply deliberate
taxation/subsidy schemes. Correspondingly, unless regions are perfectly
identical, we cannot hope to overcome the efficiency problem by
symmetrical cooperative solutions.
Stichworte
interjurisdictional tax competition;
capital and emission taxation;
efficient provision of public goods;
environmental quality
Erscheinungsjahr
1995
Serientitel
Center for Mathematical Economics Working Papers
Band
238
ISSN
0931-6558
Page URI
https://pub.uni-bielefeld.de/record/2909817
Zitieren
Upmann T. Interjurisdictional tax competition, provision of two local public goods, and environmental policy. Center for Mathematical Economics Working Papers. Vol 238. Bielefeld: Center for Mathematical Economics; 1995.
Upmann, T. (1995). Interjurisdictional tax competition, provision of two local public goods, and environmental policy (Center for Mathematical Economics Working Papers, 238). Bielefeld: Center for Mathematical Economics.
Upmann, Thorsten. 1995. Interjurisdictional tax competition, provision of two local public goods, and environmental policy. Vol. 238. Center for Mathematical Economics Working Papers. Bielefeld: Center for Mathematical Economics.
Upmann, T. (1995). Interjurisdictional tax competition, provision of two local public goods, and environmental policy. Center for Mathematical Economics Working Papers, 238, Bielefeld: Center for Mathematical Economics.
Upmann, T., 1995. Interjurisdictional tax competition, provision of two local public goods, and environmental policy, Center for Mathematical Economics Working Papers, no.238, Bielefeld: Center for Mathematical Economics.
T. Upmann, Interjurisdictional tax competition, provision of two local public goods, and environmental policy, Center for Mathematical Economics Working Papers, vol. 238, Bielefeld: Center for Mathematical Economics, 1995.
Upmann, T.: Interjurisdictional tax competition, provision of two local public goods, and environmental policy. Center for Mathematical Economics Working Papers, 238. Center for Mathematical Economics, Bielefeld (1995).
Upmann, Thorsten. Interjurisdictional tax competition, provision of two local public goods, and environmental policy. Bielefeld: Center for Mathematical Economics, 1995. Center for Mathematical Economics Working Papers. 238.
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