To harmonize or to compete? That's not the question

• 成果类型: Article; Proceedings Paper
• 署名作者: Frey, BS; Eichenberger, R
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/0047-2727(95)01555-8
• 发表日期: 1996
• 页码: 335-349
• 关键词: tax harmonization; Direct democracy; FEDERALISM

摘要

Neoclassical public economists stress economic distortions induced by differential taxation and therefore favour harmonization; political economists focus on political distortions and therefore reject harmonization. However, policy choices on the possibility frontier between economic and political distortions tend to be biased: economic advisers, politicians and interest groups typically favour harmonization. Harmonization is, moreover, undermined by incentives to re-establish tax differences. Both activities prevent the possibility frontier from being simply a menu of choice. Popular referenda and functional, overlapping, competing jurisdictions (FOCJs) are institutions able to reduce political distortions and to shift the possibility frontier.