Conditional tax competition in American states Vincent Arel-Bundock, Srinivas Parinandi
By: Arel Bundock, Vincent
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Contributor(s): Parinandi, Srinivas.
Material type: 
ArticlePublisher: 2018Subject(s): POLITICA FISCAL | FEDERALISMO FISCAL | ARMONIZACION FISCAL | COMPETENCIA FISCAL NOCIVA | EMPRESAS | LOCALIZACION | ESTADOS UNIDOSOnline resources: Click here to access online
In:
Journal of Public Policy v. 38, Issue 2, June 2018, p. 191-220Summary: Cross-border commercial activity raises issues in federations where multiple jurisdictions can claim the right to tax the same income. In the United States, this coordination problem is resolved by splitting the tax base according to the geographic distribution of firms’ sales, capital and labour. The weight of each
factor is determined on a state-by-state basis, which opens room for competitive legislative behaviour. In this complex issue area, however, policymakers must invest lot of resources to monitor competitors, evaluate policy alternatives and shepherd tax reform through the legislative process. This implies that highly
professional legislatures should be more responsive to the policies of nearby states. We consider data on most American states over the period from 1986 to 2013 and find strong evidence of conditional spatial dependence. Our findings suggest that policy diffusion may often be moderated by institutional and political factors.
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| Artículos | IEF | IEF | OP 1793/2018/2-2 (Browse shelf) | Available | OP 1793/2018/2-2 |
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| OP 1793/2018/1-1 The effect of a state income tax on migration | OP 1793/2018/2 Journal of Public Policy | OP 1793/2018/2-1 Income inequality and the growth of redistributive spending in the United States (US) states | OP 1793/2018/2-2 Conditional tax competition in American states | OP 1793/2018/3 Journal of Public Policy | OP 1793/2018/3-1 How do social security expenditures vary by state? | OP 1793/2018/4 Journal of Public Policy |
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Resumen.
Bibliografía.
Cross-border commercial activity raises issues in federations where multiple jurisdictions can claim the right to tax the same income. In the United States, this coordination problem is resolved by splitting the tax base according to the geographic distribution of firms’ sales, capital and labour. The weight of each
factor is determined on a state-by-state basis, which opens room for competitive legislative behaviour. In this complex issue area, however, policymakers must invest lot of resources to monitor competitors, evaluate policy alternatives and shepherd tax reform through the legislative process. This implies that highly
professional legislatures should be more responsive to the policies of nearby states. We consider data on most American states over the period from 1986 to 2013 and find strong evidence of conditional spatial dependence. Our findings suggest that policy diffusion may often be moderated by institutional and political factors.
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