level, a subject that is currently under debate in Germany where states do have virtually no power to tax. We use a simple … theoretical model that incorporates state surtaxes on the federal income tax bill taking into account fixed costs as well as … standards are derived. -- Fiscal federalism ; minimum standards ; tax autonomy ; fiscal equalization …

governments to levy higher tax rates, distorting local tax bases and so increasing federal transfers. To test this, I examine … Canadian provincial tax policies in the 1972-2002 period. Consistent with the theory, provinces respond to expansions of … equalization transfers by increasing their own tax rates. I estimate that on average tax rates in grant-receiving provinces were …

.S. federal grants and state tax revenues. In both OLS and IV estimates I find evidence that temporary federal aid has a … persistent effect on state finances. Each $1 of federal grants predicts eventual state tax increases of between $0.04 and $0 ….17. These effects are most evident on state personal income and corporate income taxes. There is some evidence that state tax …