Inter-regional transfers and the induced under-taxation of economic rents

ABSTRACT

Inter-regional transfers and the induced under-taxation of economic rents. Regional Studies. This paper shows that if taxes on economic rent are assigned to anticipatory first-moving regions and inter-regional transfers are mandated centrally, rents are under-taxed relative to optimal levels. This provides a possible explanation for low rent capture observed in Australia and Canada, two resource-rich federal economies that also have fiscal equalization transfers between regions.

摘要

跨区域移转与经济地租的诱发性低度课税。Regional Studies. 本文显示，若经济地租的税收被指派到预期的首先行动之区域，且跨区域移转是由中央命令的话，租金较最适层级而言是低度课税的。它提供了在澳大利亚与加拿大观察到的低度租金回收的可能解释，而这两国是资源丰沛的联邦经济体，同时在区域之间具有财政均等化的移转。

RÉSUMÉ

Mutations interrégionales et sous-imposition induite de loyers économiques. Regional Studies. La présente communication révèle que lorsque des impôts sur les loyers économiques sont affectés à des premières régions de mutation anticipées et de transferts interrégionaux, les loyers sont sous-taxés par rapport à des niveaux optimaux. Ceci pourrait expliquer le recouvrement insuffisant observé en Australie et au Canada, deux économies fédérales riches en ressources, présentant également des transferts à péréquation fiscale entre régions.

ZUSAMMENFASSUNG

Interregionaler Finanzausgleich und die induzierte Unterbesteuerung ökonomischer Renten. Regional Studies. In diesem Beitrag wird nachgewiesen, dass ökonomische Renten im Vergleich zur optimalen Höhe zu niedrig besteuert werden, wenn die Steuern auf die Renten antizipierenden Pionierregionen zugewiesen werden und der interregionale Finanzausgleich zentral verwaltet wird. Dies bietet eine mögliche Erklärung für die niedrige Rentenerfassung in Australien und Kanada, zwei rohstoffreichen bundesstaatlich organisierten Volkswirtschaften mit fiskalem Finanzausgleich zwischen den verschiedenen Regionen.

RESUMEN

Transferencias interregionales y la baja tributación inducida de las rentas económicas. Regional Studies. En este artículo se demuestra que si se tributan impuestos a la renta económica a regiones pioneras anticipatorias y las transferencias interregionales se gestionan centralmente, las rentas están sujetas a una tributación por debajo de los niveles óptimos. Esto ofrece una posible explicación para la captación baja de rentas observada en Australia y Canadá, dos economías federales ricas en recursos con transferencias de nivelación fiscal entre las regiones.

KEYWORDS:

• fiscal equalization
• regional economics
• inter-governmental relations
• regional differentials and their effects

关键词:

• 财政均等化
• 区域经济
• 政府间的关係
• 区域差异及其效应

MOTS-CLÉS:

• péréquation fiscale
• économies régionales
• relations intergouvernementales
• différentiels régionaux et leurs effets

SCHLÜSSELWÖRTER:

• fiskaler Finanzausgleich
• Regionalwirtschaft
• Beziehungen zwischen Regierungen
• regionale Differenziale und ihre Auswirkungen

PALABRAS CLAVES:

• nivelación fiscal
• economía regional
• relaciones intergubernamentales
• diferencias regionales y sus efectos

JEL:

• H73
• H77
• R10
• R12

ACKNOWLEDGEMENTS

The author acknowledges the valuable comments made by both the anonymous referees and the editor.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author.

SUPPLEMENTAL DATA

Supplemental data for this article can be accessed at http://dx.doi.org.10.1080/00343404.2017.1287892

Notes

1. For example, 7.5% for iron ore.

2. Derived from data on company tax receipts contained in Australian Bureau of Statistics (2015).

3. Thinking of as a natural resource makes the theoretical model consistent with the discussion of rent capture in resource rich economies in the second section.

4. The tax is an attempt by region to charge a fee (rental rate or shadow price), , for each unit of the natural resource used by firms.

5. See Appendix A in the supplemental data online for solution details.

6. See section B.1 of Appendix B in the supplemental data online for solution details.

7. When , the spatial efficiency condition is , and if it is . If is between 0 and 1, then is between and , consistent with the condition for spatial efficiency (equation 9).

8. First best in a fully decentralized equilibrium is not in itself new. It arises from incentive compatibility induced by migration (Mansoorian & Myers, 1993; Myers, 1990). This is the first time it has been demonstrated where regions also choose rent taxes – an added contribution of the paper. Further intuition is provided in the discussion section.