Municipal Tax Autonomy and Tax Mimicking in Czech Municipalities
DOI:
https://doi.org/10.4335/14.1.75-92(2016)Keywords:
property tax, tax mimicking, local governmentAbstract
Property tax autonomy of the Czech municipalities is quite narrow and to great extent unused. Perceived political costs of its usage are high and only 8% of municipalities utilized the possibility to increase the tax rates through so called local coefficient. Using the binary logit model and a full sample and two subsamples of Czech municipalities in 2014 the existence of tax mimicking is confirmed regardless the subsample of municipalities considered or the definition of neighbors applied. The likelihood to increase the local coefficient is to some extent influenced by the composition of the municipal council and local demographic, geographic and fiscal situation. However, the overall capacity of the model to indicate municipalities which apply local coefficient is low and suggests that there are many other or different situations or factors which result in application of local coefficient.References
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Radvan, M. (2012) The draft reform of land taxation in the czech republic, Lex Localis, 10(3), pp. 229-245.
Roubini, N., Sachs, J. D. (1989) Political and Economic Determinants of Budget Deficits in the Industrial Democracies, European Economic Review, 33(5), pp. 903-933.
Sedmihradská, L. (2010) Property Tax as a Key Tool for Fiscal Decentralization: Unfulfilled Expectations in Central and Eastern European Countries. In. Sedmihradská, L. Property Tax in Economies in Transition: Selected Case Studies, Bratislava, NISPAcee, pp. 7–15.
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Sedmihradská, L., Bryson, P. (2010) Property Tax in the Czech Republic. In. Sedmihradská, L. Property Tax in Economies in Transition: Selected Case Studies, Bratislava: NISPAcee. pp. 70–94.
Silva Costa, J., Carvalho, A., Coimbra, M.L. (2011). Is There Yardstick Competition among Portuguese Municipalities? Urban Public Economics Review, 15, pp. 32-61.
Solé Ollé, A. (2003) Electoral accountability and tax mimicking: the effects of electoral margins, coalition government, and ideology, European Journal of Political Economy, 19(4), pp. 685–713
Vermeir, J., Heyndels, B. (2006). Tax Policy and Yardstick Voting in Flemish Municipal Elections, Applied Economics, 38(19), pp. 2285-2298.
Bahl, R. (1999) Fiscal decentralization as development policy, Public Budgeting & Finance, 19(2), pp. 59-75.
Bečica, J. (2014) Czech Municipalities and Real Estate Tax, In.
Sedmihradska, L. Proceedings of the 19th International Conference: Theoretical and Practical Aspects of Public Finance, Praha.
Besley, T., Case, A. (1995) Incumbent behaviour: Vote-seeking, tax-setting, and yardstick competition, American Economic Review, 85(1), pp. 25-45.
Bird, R. (1993) Threading the fiscal labyrinth: Some issues in fiscal decentralization, National tax journal, 46(2), pp. 207- 227
Bird, R., Freund, C., Wallich, C. (1994) Decentralization of intergovernmental finance in transition economies, Comparative economic studies, 36(4), pp. 149- 160
Bland, R.L. (1989) A revenue guide for local government. Washington, D.C.: ICMA
Blöchliger, H., Campos, J. (2011) Tax Competition between Sub-Central Governments. OECD Economics Department Working Papers. No 872.
Blöchliger, H., Rabesona, J. (2009) The Fiscal Autonomy of Sub-Central Governments: An Update. OECD Working Papers on Fiscal Federalism. No 9.
Bryson, P. J., Cornia, G. C. (2003). Moral Hazard in Property Tax Administration: A Comparative Analysis of the Czech and Slovak Republics. Comparative Economic Studies (Association For Comparative Economic Studies), 45(1), 44.
Delgado, F. J., Lago-Peñas, S., Mayor, M. (2015) On the Determinants of
Local Tax Rates: New Evidence from Spain, Contemporary Economic Policy, 33(2), pp. 351-368
Delgado, F. J., Mayor, M. (2011) Tax Mimicking among Local Governments: Some Evidence from Spanish Municipalities, Portuguese Economic Journal, 10(2), pp. 149-164.
Delgado, F. J. (2012) Determination of local tax mix: Evidence from spain, Lex Localis, 10(4), pp. 311-321.
Dillinger, W. (1988) Urban property taxation in developing countries, World Bank working papers, WPS 41
Dubois, E., Paty, S. (2010) Yardstick competition: which neighbours matter? The Annals of Regional Studies, 44(3), pp. 433-452.
Fiva, J. H., Rattsø, J. (2007) Local Choice of Property Taxation: Evidence from Norway, Public Choice, 132(3-4), pp. 457-470.
Hansen, T., Noer, H. (2010). The political effects of local property taxation in Norway, Lex Localis, 8(4), 313-327.
Hettich, W., Winer, S. L. (1988) Economic and political foundations of tax structure, The American Economic Review, 78(4), pp. 701-712.
Heyndels, B., Vuchelen, J. (1998) Tax mimicking among Belgian municipalities. National Tax Journal, 51(1), pp.89-101.
Lyytikäinen, T. (2011) Tax Competition among Local Governments: Evidence from a Property Tax Reform in Finland. Document de treball de l’IEB 2011/35. Barcelona: Institute of Economics.
Ministry of Finance (2014) Tax Statistics [online] http://www.financnisprava.cz/cs/dane-a-pojistne/analyzy-a-statistiky/danova-statistika (25.5.2015)
Padovano, F., Petrarca, I. (2014) Are the responsibility and yardstick competition hypotheses mutually consistent? European Journal of Political Economy, 34 pp. 459-477
Peters, B.G. (2009) The two futures of governing: The Two Futures of Governing: Decentering and Recentering Processes in Governing. The NISPAcee Journal of Public Administration and Policy, 2(1). pp. 7-24.
Oates, W. E. (1999) Local property taxation: An assessment. Assessment Journal, September/October, pp. 67-69.
Provazniková, R. (2007) Financování měst, obcí a regionů: teorie a praxe. Praha: Grada Publishing.
Radvan, M. (2012) The draft reform of land taxation in the czech republic, Lex Localis, 10(3), pp. 229-245.
Roubini, N., Sachs, J. D. (1989) Political and Economic Determinants of Budget Deficits in the Industrial Democracies, European Economic Review, 33(5), pp. 903-933.
Sedmihradská, L. (2010) Property Tax as a Key Tool for Fiscal Decentralization: Unfulfilled Expectations in Central and Eastern European Countries. In. Sedmihradská, L. Property Tax in Economies in Transition: Selected Case Studies, Bratislava, NISPAcee, pp. 7–15.
Sedmihradská, L. (2013) Yardstick Competition in Case of the Czech Property Tax. Review Of Economic Perspectives, 13(2), pp. 77-91.
Sedmihradská, L., Bryson, P. (2010) Property Tax in the Czech Republic. In. Sedmihradská, L. Property Tax in Economies in Transition: Selected Case Studies, Bratislava: NISPAcee. pp. 70–94.
Silva Costa, J., Carvalho, A., Coimbra, M.L. (2011). Is There Yardstick Competition among Portuguese Municipalities? Urban Public Economics Review, 15, pp. 32-61.
Solé Ollé, A. (2003) Electoral accountability and tax mimicking: the effects of electoral margins, coalition government, and ideology, European Journal of Political Economy, 19(4), pp. 685–713
Vermeir, J., Heyndels, B. (2006). Tax Policy and Yardstick Voting in Flemish Municipal Elections, Applied Economics, 38(19), pp. 2285-2298.
Published
2015-09-07
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