{"id":342,"date":"2006-11-02T09:11:21","date_gmt":"2006-11-02T08:11:21","guid":{"rendered":"http:\/\/people.unil.ch\/mariusbrulhart\/?p=342"},"modified":"2023-02-01T15:13:08","modified_gmt":"2023-02-01T14:13:08","slug":"vertical-versus-horizontal-tax-externalities-an-empirical-test","status":"publish","type":"post","link":"https:\/\/people.unil.ch\/mariusbrulhart\/2006\/11\/vertical-versus-horizontal-tax-externalities-an-empirical-test\/","title":{"rendered":"Vertical Versus Horizontal Tax Externalities: An Empirical Test"},"content":{"rendered":"\n<p>with Mario Jametti, <em>Journal of Public Economics,\u00a0<\/em>90(10):\u00a02027-2062,\u00a02006. <a href=\"https:\/\/people.unil.ch\/mariusbrulhart\/files\/2023\/02\/verticaltest69.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">See publication<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>We study taxation externalities in federations of benevolent governments. Where different hierarchical government levels tax the same base, one can observe two types of externalities: a horizontal externality, working among governments of the same level and leading to tax rates that are too low compared to the social optimum; and a vertical externality, working between different levels of government and leading to suboptimally high tax rates. Building on the model of Keen and Kotsogiannis (2002), we derive a discriminating hypothesis to distinguish vertical and horizontal tax externalities based on observable variables. This test is applied to a panel data set on local taxes in a sample of Swiss municipalities that feature direct-democratic fiscal decision making, so as to maximize the correspondence with the &quot;benevolent&quot; governments of the theory. We find that vertical externalities dominate &#8211; they are thus an observed empirical phenomenon as well as a notable extension to the theory of tax competition.<\/p>\n","protected":false},"author":1001107,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[3],"tags":[],"class_list":{"0":"post-342","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-peer-reviewed"},"_links":{"self":[{"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/posts\/342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/users\/1001107"}],"replies":[{"embeddable":true,"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/comments?post=342"}],"version-history":[{"count":0,"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/posts\/342\/revisions"}],"wp:attachment":[{"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/media?parent=342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/categories?post=342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/people.unil.ch\/mariusbrulhart\/wp-json\/wp\/v2\/tags?post=342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}