Culture and Taxes
Journal
Journal of Political Economy
ISSN
0022-3808
Type
journal article
Date Issued
2019-02
Author(s)
Abstract
We propose a difference-in-differences strategy to identify the existence of interjurisdictional tax competition. Our strategy rests on differences between desired tax levels determined by culture-specific preferences and equilibrium tax levels determined by fiscal externalities and by preferences. While preferences differ systematically between French-speaking and German-speaking Swiss municipalities, local income tax burdens exhibit smooth spatial gradients. To qualify the empirical evidence, we develop a theoretical model of strategic tax setting by local governments that anticipate the effects of taxes on the per capita income and the median “hedonic” income, two inextricable consequences of the sorting of heterogeneous individuals.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Publisher
Univ. Press
Volume
127
Number
1
Start page
296
End page
337
Pages
42
Subject(s)
Division(s)
Eprints ID
238690