Dynamic tax externalities and the US fiscal transformation

• 成果类型: Article
• 署名作者: Gonzalez-Eiras, Martin; Niepelt, Dirk
• 署名单位: University of Copenhagen; Study Center Gerzensee; University of Bern
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.02.007
• 发表日期: 2020
• 页码: 144-158
• 关键词: Fiscal federalism; Tax centralization; grants; Politico-economic equilibrium

摘要

We propose a theory of tax centralization in politico-economic equilibrium. Taxation has dynamic general equilibrium implications which are internalized at the federal, but not at the regional level. The political support for taxation therefore differs across levels of government. Complementarities on the spending side decouple the equilibrium composition of spending and taxation and create a role for inter governmental grants. The model provides an explanation for the centralization of revenue, introduction of grants, and expansion of federal income taxation in the U.S. around the time of the New Deal. Quantitatively, it accounts for approximately 30% of the federal revenue share's doubling in the 1930s, and for the long-term increase in federal grants. (c) 2019 Elsevier B.V. All rights reserved.