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dc.contributor.authorCrivelli, Ernestoen_US
dc.contributor.authorVolpe Martincus, Christianen_US
dc.description.abstractRecent contributions on tax competition recognize the interaction between both horizontal and vertical tax externalities in a single federation. In this paper, we extend the theoretical analysis to a framework with multiple federations (a Union). We show that the relative size of a federation in the Union determines not only the extent but also the direction of the tax ine? ciency. The equilibrium state tax is lower in relative small countries but surprisingly, vertical externalities are more likely to dominate there, i.e. for a relative small federation, the non-cooperative local tax rate is lower than for a relative large federation but still higher than the one observed in absence of tax competition. This result seems to contradict recent theoretical …ndings where a lower equilibrium state tax is followed by a dominant horizontal externality.en_US
dc.relation.ispartofseriesBonn econ discussion papers 2007,8en_US
dc.subject.keywordTax Competitionen_US
dc.subject.keywordHorizontal Externalitiesen_US
dc.subject.keywordVertical Externalitiesen_US
dc.subject.keywordFiscal Federalismen_US
dc.subject.stwExterner Effekten_US
dc.titleHorizontal and Vertical Tax Externalities in a Multicountry Worlden_US
dc.typeWorking Paperen_US
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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