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Intra-Jurisdictional Tax Competition

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  • Jonathan Klick
  • Francesco Parisi

Abstract

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. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Jonathan Klick & Francesco Parisi, 2005. "Intra-Jurisdictional Tax Competition," Constitutional Political Economy, Springer, vol. 16(4), pages 387-395, December.
    • Handle: RePEc:kap:copoec:v:16:y:2005:i:4:p:387-395
    DOI: 10.1007/s10602-005-4319-7
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    References listed on IDEAS

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    1. Goodspeed, Timothy J., 2000. "Tax structure in a federation," Journal of Public Economics, Elsevier, vol. 75(3), pages 493-506, March.
    2. Laurent Flochel & Thierry Madies, 2002. "Interjurisdictional Tax Competition in a Federal System of Overlapping Revenue Maximizing Governments," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(2), pages 121-141, March.
    3. Clotfelter, Charles T, 1983. "Tax-Induced Distortions and the Business-Pleasure Borderline: The Case of Travel and Entertainment," American Economic Review, American Economic Association, vol. 73(5), pages 1053-1065, December.
    4. Parisi, Francesco & Schulz, Norbert & Klick, Jonathan, 2006. "Two dimensions of regulatory competition," International Review of Law and Economics, Elsevier, vol. 26(1), pages 56-66, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Galle, Brian, 2014. "The effect of national revenues on sub-national revenues evidence from the U.S," International Review of Law and Economics, Elsevier, vol. 37(C), pages 147-155.
    2. Parisi, Francesco & Schulz, Norbert & Klick, Jonathan, 2006. "Two dimensions of regulatory competition," International Review of Law and Economics, Elsevier, vol. 26(1), pages 56-66, March.

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    More about this item

    Keywords

    tax; federalism; harmonization; rent-seeking; commons; H20; H77;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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