Public-Input Provision under Formula Apportionment - 10.1628/001522116X14557023949256 - Mohr Siebeck
Economics

Mutsumi Matsumoto

Public-Input Provision under Formula Apportionment

Section: Articles
FinanzArchiv (FA)

Volume 72 () / Issue 1, pp. 74-95 (22)

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This paper analyzes how the presence of corporate income taxation with formula apportionment affects public-input provision. In a federation endowed with a fixed amount of mobile capital, noncooperative regional governments provide factor-augmenting public inputs and maximize their budget surplus. It is shown that the different systems of formula apportionment have different implications for expenditure inefficiency, although interregional competition for mobile capital always results in undertaxation.
Authors/Editors

Mutsumi Matsumoto No current data available.