Fiscal Incentive Effects of the Australian Equalisation System
Equalisation grants can affect a state's fiscal behaviour because its tax policies can affect the size of its grant. For a large state, an increase in its tax rate will increase the standard tax rate used to calculate the grant for that base and thereby reduce (increase) the state's grant if it has a high (low) relative fiscal capacity with respect to that base. In addition, a state's grant will increase if its relative fiscal capacity declines when it raises its tax rates. Our econometric results indicate that the equalisation system may have affected the Australian states' choice of tax rates. Copyright 2003. The Economic Society of Australia.
Year of publication: |
2003
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Authors: | Dahlby, Bev ; Warren, Neil |
Published in: |
The Economic Record. - Economic Society of Australia - ESA, ISSN 1475-4932. - Vol. 79.2003, 247, p. 434-445
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Publisher: |
Economic Society of Australia - ESA |
Saved in:
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