Journal article


Shared Tax Sources and Public Expenditures


Publication Details
Author(s): Wrede M
Publisher: Springer Verlag (Germany)
Publication year: 2000
Volume: 7
Pages range: 163-175
ISSN: 0927-5940
Language: English

Abstract

This paper deals with a specific vertical assignment of public functions in a federation: Two levels of government share both the same tax source and expenditure on a productivity increasing public service. We consider surplus maximizing Leviathan governments which provide public services in order to increase their potential tax base. The Nash equilibrium is characterized by overtaxation and relative to surplus maximization—depending on whether or not the public goods are sufficiently complementary with the entire tax base—either underprovision or overprovision of the public service. The implications of these results, in terms of welfare and potential use for earmarking taxes are also considered.



How to cite
APA: Wrede, M. (2000). Shared Tax Sources and Public Expenditures. International Tax and Public Finance, 7, 163-175. https://dx.doi.org/10.1023/A:1008752403978

MLA: Wrede, Matthias. "Shared Tax Sources and Public Expenditures." International Tax and Public Finance 7 (2000): 163-175.

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