LOCAL GOVERNMENT TAX COMPETITION IN CZECHOSLOVAKIA 1918-1938
Journal Title: Вісник Київського національного університету імені Тараса Шевченка. Економіка. - Year 2014, Vol 2, Issue 155
Abstract
The study evaluates tax competition among local governments in Czechoslovakia during the interwar period. They enjoyed significant tax autonomy, in many aspects absolutely unimaginable from today's point of view. The purpose of the paper is to find out if tax mimicking occurred in the pre-war Czechoslovakia and if there was a relationship between local tax policy and migration. Empirical analysis of the municipal and overall additional tax rates in 242 districts proved tax mimicking among them, however with significant regional differences. These findings are consistent with the recent empirical studies on local government tax interactions. There were also found statistically significant evidence of interaction between additional tax rates and migrations. Higher additional tax rates were in districts with higher out migration. District with low tax base had to impose higher tax rates in order to collect sufficient revenues, low tax base is associated with low economic performance which pushes people to move to wealthier districts which can at the same time impose lower tax rates because of high tax base. The example from the history shows that no "race to the bottom" took place and that the possibility to generate revenues by local governments even in hard times enabled local governments to function well.
Authors and Affiliations
J. Haas, L. Sedmihradská
Keywords
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- EP ID EP403067
- DOI 10.17721/1728-2667.2014/155-2/3
- Views 45
- Downloads 0
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