Vertical tax competition and consumption externalities in a federation with lobbying

• 成果类型: Article
• 署名作者: Esteller-More, Alejandro; Galmarini, Umberto; Rizzo, Leonzio
• 署名单位: University of Insubria; University of Barcelona; University of Ferrara
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2011.11.003
• 发表日期: 2012
• 页码: 295-305
• 关键词: Vertical tax externalities; Tax assignment; Pressure groups; excise taxes; Leviathan policy makers

摘要

We consider a federation with two layers of government, in which Leviathan policy makers levy an excise tax on a consumption good that generates a negative externality and that is produced in an imperfectly competitive market. When both layers of government are allowed to tax, policy choices are affected also by vertical tax competition. In this setting, tax policy in general is not efficient. We then examine how special interest groups may influence tax policy by lobbying the policy makers. We find that, depending on market structure and on the level of the externality, lobbying can improve efficiency, and that tax-base sharing by two layers of government can be more efficient than taxation by a single layer. (C) 2011 Elsevier B.V. All rights reserved.