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Journal Articles Economics Year : 2014

Tax Competition and the Determination of the Quality of Public Goods

A.H. Ould H Ould Abdessalam
  • Function : Author
Eric Kamwa

Abstract

In this paper, the author analyzes the behavior of local governments in capital taxation when the financial choices in terms of the quality of public goods are made done by a central planner. More specifically, he asks the question of whether a local government has an interest in taxing the mobile factor in addition to the tax on representative households. Through a comparison of social welfare given the strategies chosen by local governments, the author shows that whatever the quality and cost of public goods, a local government always has an interest in taxing the mobile factor. This leads to a Nash equilibrium in the dominant strategy in their model. JEL D00 H20 H41 H70
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Dates and versions

hal-01757768 , version 1 (03-04-2018)

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A.H. Ould H Ould Abdessalam, Eric Kamwa. Tax Competition and the Determination of the Quality of Public Goods. Economics , 2014, 8 (2014-12), pp.2014 - 2026. ⟨10.5018/economics-ejournal.ja.2014-12⟩. ⟨hal-01757768⟩
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