Evaluating the efficiency and equity of federal fiscal equalization

• 成果类型: Article
• 署名作者: Albouy, David
• 署名单位: University of Michigan System; University of Michigan; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2012.05.015
• 发表日期: 2012
• 页码: 824-839
• 关键词: Fiscal equalization; Federal taxation; Source-based and residence-based taxes; Horizontal equity; Cost-of-living; Compensating wage differentials

摘要

Theoretically, federal transfers that make household location decisions efficient should ignore local cost differences, subsidize positive externalities, and offset differences in federal-tax payments and local taxes levied on non-residents, but not local tax revenues from residents. Transfers that redistribute resources equitably across regions will likely target areas with individuals of low earnings potential or low real incomes. Applying these criteria empirically, Canadian equalization policy appears neither efficient nor equitable, but exacerbates pre-existing inefficiencies and underfunds minorities. Locational inefficiencies cost Canada 0.41% of income annually and cause over-funded provinces to have populations of 30% beyond their efficient long-run levels. (C) 2012 Elsevier B.V. All rights reserved.