Universität zu Köln

Rauch, Anna and Hummel, Caroline-Antonia (2016). How to stop the race to the bottom. Int. Tax Public Financ., 23 (5). S. 911 - 934. DORDRECHT: SPRINGER. ISSN 1573-6970

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Abstract

Standard tax multipliers are a widespread feature of fiscal equalization systems. A simple theoretical model shows that actual tax multipliers respond positively to changes in standard tax multipliers. This theoretical prediction is tested empirically using data on municipalities in Germany. A quasi-experiment in the state of North Rhine-Westphalia is exploited to identify the incentive effect. The empirical results confirm that local business tax policy is shaped by standard tax multipliers. They provide a straightforward practical tool to avoid a race to the bottom in local business tax rates.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Rauch, Anna UNSPECIFIED UNSPECIFIED UNSPECIFIED Hummel, Caroline-Antonia UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-261901
DOI:	10.1007/s10797-015-9387-7
Journal or Publication Title:	Int. Tax Public Financ.
Volume:	23
Number:	5
Page Range:	S. 911 - 934
Date:	2016
Publisher:	SPRINGER
Place of Publication:	DORDRECHT
ISSN:	1573-6970
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language EQUALIZATION Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/26190