Baretti, Christian; Huber, Bernd; Lichtblau, Karl - In: International Tax and Public Finance 9 (2002) 6, pp. 631-649
Several recent studies suggest that equalizing transfers in a federal system may distort the tax policy decisions of states. We study this issue for the German federal fiscal system. In a simple theoretical model, we first identify a substitution effect and an income effect of equalizing...