Fiscal harmonization in the context of globalization and growing demand of more regional autonomy
- Autores: Patricia Sanz Cordoba
- Directores de la Tesis: Bernd Theilen (dir. tes.)
- Lectura: En la Universitat Rovira i Virgili ( España ) en 2017
- Idioma: español
- Tribunal Calificador de la Tesis: Miguel Angel Lopez Garcia (presid.), Carolina Manzano (secret.), Stefan Traub (voc.)
- Programa de doctorado: Programa de Doctorado en Economía y Empresa por la Universidad Rovira i Virgili
- Materias:
- Enlaces
- Tesis en acceso abierto en: hdl.handle.net TDX
- Resumen
The first chapter analyzes how partial tax harmonization within a coalition of asymmetric jurisdictions is influenced by a simultaneous coordination of infrastructure investments. For this purpose, we use the tax competition model, conceding a subset of jurisdictions to form a tax coalition. Moreover, asymmetries in productivity levels between jurisdictions are allowed. Two kinds of infrastructure coordination are considered: infrastructure coordination with jurisdiction-specific investments and through the choice of a common investment level. The main results of the chapter can be summarized as follows. First, partial tax harmonization can be welfare enhancing for tax coalition members whenever they are not too different in their productivity levels.
Second, tax harmonization becomes feasible when tax coalition members dispose of additional instruments for the coordination of tax and nontax policies even if productivity asymmetries between them are substantial. Therefore, productivity asymmetries represent a serious handicap for partial tax harmonization that can be remedied by coordinating nontax instruments when they allow reducing these asymmetries. Finally, infrastructure coordination through the choice of a common investment level is particularly indicated when asymmetries between potential members of a tax coalition are large. However, infrastructure coordination does not always facilitate partial tax harmonization. The current usage of structural funds orientated to reduce regional infrastructure deficits is therefore suitable to facilitate tax harmonization within the EU.
The second chapter considers partial tax harmonization as a strategic response to international tax competition in a more general setting where a country can also be a fiscally decentralized economy. We analyze a country's optimal fiscal strategy in the context of international (and national) tax competition. For this purpose, we build on the tax competition models, allowing a subset of centralized jurisdictions to form a tax coalition. Countries are also asymmetric in productivity levels but characterized by multilevel government such that there is both horizontal and vertical tax competition. Three strategies are considered: i) fiscal centralization under which the central government decides all tax rates in the country; ii) fiscal decentralization under which central and local governments choose independently their capital tax rates; and iii) partial tax harmonization under which two countries form a tax union that commonly determines a unique tax rate for all jurisdictions. The main result from the analysis is that fiscal decentralization is a handicap in achieving partial tax harmonization. Thus, it is shown that tax harmonization is more difficult to achieve in fiscally decentralized economies with high levels of productivity. This result is confirmed by recent data and explains the observed difficulties in achieving capital tax harmonization in the EU.
The last chapter investigates the existence of fiscal interdependence at international level (among OECD countries) considering the importance of combating the ``harmful" tax practices. We address the question whether or not fiscal interactions between governments exist, mainly due to tax competition, yardstick competition, or externalities spillovers. Finally, we address the theoretical assumption that governments with similar public investment levels increase these fiscal interdependence among governments. For this purpose, we use a spatial panel data model. The results reveal existence of tax interdependence in the closest neighboring OECD countries where international tax competition still occurs. The fiscal interdependence is higher for countries with similar public investment levels. Therefore, the hypothesis that countries with similar public investment levels incur in higher fiscal interactions is accepted.
