Tax Decentralization and Public Deficits in OECD Countries

• Autores: Thushyanthan Baskaran
• Localización: Publius: the journal of federalism, ISSN 0048-5950, Vol. 42, Nº. 4, 2012, págs. 688-707
• Idioma: inglés
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• Resumen

  • This article explores the effect of sub-national tax autonomy and sub-national control over shared taxes on primary deficits with panel data for 23 OECD countries over the 1975–2000 period. The results suggest that sub-national tax autonomy has a U-shaped effect on primary deficits. We find that the “average” country in the sample could increase the fiscal stability of its public sector by reducing sub-national tax autonomy. There is also some indication that sub-national control over shared taxes increases fiscal stability, but we obtain this result only if Belgium and Spain are included in the sample.