- Additional Authors
- Petzold, Oliver.
- Description
- 39 p.; 21 x 29.7cm.
- Summary
- This paper analyses trends and driving forces in the revenue composition of sub-central government (SCG). Between 1995 and 2005 the share of SCG in total government spending increased significantly from 31 to 33 percent while the SCG tax share remained stable at around 17 percent, increasing SCG's dependence on intergovernmental grants. While equal access to public services is the most common justification for such grants, the grant systems of most countries are much larger than required by equalization. Moreover, rather than smoothing out SCG revenue fluctuations over the cycle, grants often tend to exacerbate them. Finally, there is some evidence that grants reduce SCG tax effort, inflate SCG spending and increase SCG deficits and debt. Efficiency and accountability would call for a higher share of SCG spending covered by own taxes. However, that is not easy: increasing property taxes – the most suitable tax for SCG – usually meets with strong resistance. Tax sharing arrangements where central government cedes a part of its income or consumption tax revenue could help lift the SCG tax share without increasing the total tax burden.
- Series Statement
- OECD Working Papers on Fiscal Federalism, 2226-5848 ; no.7
- Uniform Title
- OECD Working Papers on Fiscal Federalism, no.7.
- Subject
- Taxation
- LCCN
- 10.1787/5k97b11972bn-en
- OCLC
- oecd-lib
- Author
Blöchliger, Hansjörg.
- Title
Taxes and Grants [electronic resource]: On the Revenue Mix of Sub-Central Governments / Hansjörg Blöchliger and Oliver Petzold
- Imprint
Paris : OECD Publishing, 2009.
- Series
OECD Working Papers on Fiscal Federalism, 2226-5848 ; no.7
OECD Working Papers on Fiscal Federalism, 2226-5848 ; no.7.
- Connect to:
- Indexed Term
Taxation
- Added Author
Petzold, Oliver.
- Other Standard Identifier
10.1787/5k97b11972bn-en doi