NONLINEAR INCOME TAXATION AND MATCHING GRANTS IN A FEDERATION WITH DECENTRALIZED IN-KIND TRANSFERS

• 成果类型: Article
• 署名作者: Blomquist, Soren; Micheletto, Luca
• 署名单位: Uppsala University; University of Milan; Bocconi University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.1468-2354.2009.00540.x
• 发表日期: 2009
• 页码: 543-575
• 关键词: local public-goods; property taxation; Tax competition; optimal-design; private goods; provision; redistribution; externalities; equilibrium; instruments

摘要

We extend to a fiscal federalism setting the literature on redistributive in-kind transfers in the presence of nonlinear income taxation. Local governments have a cost advantage, motivating decentralization of the in-kind transfer. The cost structure varies across regions, and the central government cannot observe which region is which. We show that decentralized in-kind transfers can, in this setting, be an even more important instrument for relaxing self-selection constraints, thus, helping redistribution, than in single-government models. We characterize the optimal marginal tax rates and matching grants. The grants have a very different structure than the one derived in earlier studies.