We analyse how spillover effects may affect the choice of a federal tax rate in a federal country with vertical tax externalities. Our main result shows the conditions under which the federal tax rate with spillover effects is lower or higher than the federal tax rate without spillover effects. The effects of vertical tax externalities can be modified by the reaction of the federal government to the horizontal externality due to spillover effects.
Spillover Effects in a Federal Country with Vertical Tax Externalities / Lisa, Grazzini; Alessandro, Petretto. - In: PUBLIC FINANCE REVIEW. - ISSN 1091-1421. - STAMPA. - 45:(2017), pp. 701-720. [10.1177/1091142116671803]
Spillover Effects in a Federal Country with Vertical Tax Externalities
GRAZZINI, LISA;PETRETTO, ALESSANDRO
2017
Abstract
We analyse how spillover effects may affect the choice of a federal tax rate in a federal country with vertical tax externalities. Our main result shows the conditions under which the federal tax rate with spillover effects is lower or higher than the federal tax rate without spillover effects. The effects of vertical tax externalities can be modified by the reaction of the federal government to the horizontal externality due to spillover effects.I documenti in FLORE sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.