US excise tax horizontal interdependence: yardstick versus tax competition

Moré, Alejandro Esteller; Rizzo, Leonzio

doi:10.1007/s00168-014-0607-3

Cited by 12 publications

(16 citation statements)

References 32 publications

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“…Time dependence was substantially stronger than space dependence; ϕ had a mean of 0.82, four times as large as ρ , with a mean of 0.20. This finding supports the results from Esteller‐Moré and Rizzo (). The space–time interaction term, θ , was negative using the 0.01 and 0.99 intervals.…”

Section: Resultssupporting

confidence: 92%

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Special‐interest Spillovers and Tobacco Taxation

Hoffer

2015

Contemporary Economic Policy

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This study explores the effects tobacco special interest has had on cigarette tax rates. Using a spatial econometric model to control for tax competition and the endogeneity present in state tax rates, this study finds that tobacco special interest has played a significant role in influencing state cigarette tax rates. Pounds of tobacco grown in a state and tobacco industry campaign contributions are associated with lower cigarette tax rates. The empirical results show that the magnitude of the special-interest effect can be two to five times as large when the spatial spillover effects are included. (JEL C23, H71, H73) ABBREVIATIONS LM: Lagrange Multiplier LR: Likelihood Ratio MCMC: Markov Chain Monte Carlo OLS: Ordinary Least Squares SAR: Spatial Autoregressive SDM: Spatial Durbin Model SEM: Spatial Error Model SLX: Spatial Lag of X 146

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Section: Resultssupporting

confidence: 92%

“…Several studies have recently documented the importance of controlling for tax rate persistence in spatial models (Debarsy, Ertur, and LeSage ; Devereux, Lockwood, and Redoano ; Esteller‐Moré and Rizzo ). Debarsy, Ertur, and LeSage () develop a dynamic space–time panel version of the SDM.…”

Section: Data and Spatial Modelmentioning

confidence: 99%

Special‐interest Spillovers and Tobacco Taxation

Hoffer

2015

Contemporary Economic Policy

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“…Solé- Ollé, 2003;Bartolini & Santolini, 2012, or Esteller-Moré & Rizzo, 2014. In the presence of elections, the government's reaction to its neighbours' policy is expected to be greater; by contrast, an incumbent party with a large electoral margin is expected to show little reaction to its neighbours' policy.…”

Section: Testing the Yardstick Competition Hypothesismentioning

confidence: 99%

Empirical evidence on horizontal competition in tax enforcement

Durán-Cabré

Esteller

Salvadori

2014

Int Tax Public Finance

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113

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Tax auditing parameters have been largely overlooked by the literature as policy-making instruments of any relevance; however, enforcement strategies are critical elements of the tax burden. In this paper we show that, in a federal framework, tax auditing policies can serve as additional tools for regional interaction. We examine the presence of this interaction by adopting a spatial econometric approach. We employ a spatial panel autoregressive model and obtain results that are congruent with standard theory, corroborating the presence of horizontal competition between regions in their tax auditing policies. We also find that once regional governments acquire legal power, the opaque competition in enforcement policies appears to switch in part to a more transparent competition in statutory tax parameters.

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“…In this scenario, politicians in one jurisdiction tend to match low tax rates in other jurisdictions to signal their governance capability and to gain support from voters with asymmetric information (Besley & Case, 1995; Besley & Smart, 2007). Yardstick competition through taxation has been identified on the basis of evidence from the U.S. (Besley & Case, 1995; Esteller‐Moré & Rizzo, 2014), Italy (Bordignon et al., 2003; Padovano & Petrarca, 2014), Spain (Bosch & Solé‐Ollé, 2007; Solé‐Ollé, 2003), Netherlands (Allers & Elhorst, 2005), Belgium (Vermeir & Heyndels, 2006), France (Dubois & Paty, 2010), and elsewhere.…”

Section: Introductionmentioning

confidence: 99%

Tax enforcement interactions among Chinese provinces: A frontier and spatial analysis

Chen

2020

Growth and Change

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Spatial interactions in tax policy have been examined intensively for developed countries. This study presents new evidence of tax enforcement interactions from a developing country. A trend of intensified enforcement on the corporate income tax (CIT) over time is identified among Chinese provinces. Additionally, stringent CIT enforcement in neighboring provinces enhances CIT enforcement in the surrounded province. Furthermore, tax enforcement interactions involve both the state and local tax authorities. The findings not only help to understand the Chinese “regionally decentralized authoritarian system,” but also echo second‐generation fiscal federalism that highlights the role of institutional incentives in shaping intergovernmental fiscal relations.

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US excise tax horizontal interdependence: yardstick versus tax competition

Cited by 12 publications

References 32 publications

Special‐interest Spillovers and Tobacco Taxation

Special‐interest Spillovers and Tobacco Taxation

Empirical evidence on horizontal competition in tax enforcement

Tax enforcement interactions among Chinese provinces: A frontier and spatial analysis

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