Centralization Trade-off with Non-uniform Taxation

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Title:Centralization Trade-off with Non-uniform Taxation
Creators:
Gregor, Martin
Tuchyňa, Peter
Journal or Publication Title:
AUCO Czech Economic Review, 1, 3, pp. 223-254
Uncontrolled Keywords:decentralization, taxation, local public goods

Abstract

When local public goods are provided by a centralized authority, spillovers are internalized, but heterogeneity in preferences may be suppressed. Besley and Coate (2003) recently examined this classic trade-off for a uniform tax regime with strategic delegation. Here, we extend their approach by allowing for a non-uniform tax regime. We find that centralization with nonuniform taxation unambiguously increases welfare in comparison to uniform-tax centralization. With non-cooperative legislators coming from symmetric districts, our centralization dominates decentralization for any degree of spillovers. In other cases, non-uniform taxation at least improves the odds of centralization, if measured by a utilitarian yardstick.

Official URL: http://www.ceeol.com/aspx/issuedetails.aspx?issueid=D4F9AADE-5C65-4E11-80F4-D34C7C0CD667&articleid=DC2607D0-DD62-4737-8F65-D46E8CC60912

Title:Centralization Trade-off with Non-uniform Taxation
Creators:
Gregor, Martin
Tuchyňa, Peter
Uncontrolled Keywords:decentralization, taxation, local public goods
Subjects:H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
H Social Sciences > HF Commerce
Divisions:Section of external journals > AUCO Czech Economic Review
Journal or Publication Title:AUCO Czech Economic Review
Volume:1
Number:3
Page Range:pp. 223-254
ISSN:1802-4696
Publisher:Charles University
Related URLs:
URLURL Type
http://auco.cuni.czPublisher
http://avi.lib.cas.cz/node/183Publisher
ID Code:4307
Item Type:Article
Deposited On:01 Jun 2009 18:32
Last Modified:01 Jun 2009 16:32

Citation

Gregor, Martin; Tuchyňa, Peter (2007) Centralization Trade-off with Non-uniform Taxation. AUCO Czech Economic Review, 1 (3). pp. 223-254. ISSN 1802-4696

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