Resource title

Do fiscal transfers alleviate business tax competition?: evidence from Germany

Resource image

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Resource description

The paper empirically analyzes the incentive effects of equalizing transfers on business tax policy by exploiting a natural experiment in the state of Lower Saxony which changed its equalization formula as of 1999. We resort to within-state and across-state difference-indifference estimates to identify the reform effect on municipalities' business tax rates. Confirming the theoretical prediction, the reform had a significant impact on the municipalities tax policy in the four years after the reform with a phasing out of the effect starting in the fourth to fifth year. The finding is robust to various alternative specifications.

Resource author

Peter Egger, Marko Koethenbuerger, Michael Smart

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26000

Resource license

Adapt according to the presented license agreement and reference the original author.