Explaining Strategies in Setting Own Local Taxes in Slovenia
DOI:
https://doi.org/10.4335/20.1.239-257(2022)Keywords:
local tax, taxing strategy, fiscal policy, fiscal autonomyAbstract
There are numerous ways for localities to exercise tax powers. However, not all localities utilize their taxing powers. Taxation strategies are numerous and are influenced by the size of local government, the percentage of taxes that the local government takes, share and the local government’s autonomy over taxation. Local governments in Slovenia have some tax autonomy, but local taxes only represent about 13 percent of municipal total tax revenue. This article reviews taxation by local governments in Slovenia as well as some potential reasons for their under-taxing. We can conclude that local governments in Slovenia use local taxes as a fiscal measure and that share of (all) own taxes positively correlate to the size of the municipality. Small municipalities tend to under-tax (or avoid taxing completely), and since equalisation mechanisms do not reward taxation inactivity, the most probable explanation for this practice is closeness to the electorate.
References
Bačlija, I. (2013) A reconceptualisation of urban management: The administration of cities, their services, and their growth (New York: The Edwin Mellen Press).
Blöchliger, H. (2008) Tax assignment and tax autonomy in OECD countries, In: Bosch, N. & Durán, J. M. (eds) Fiscal federalism and political decentralization: Lessons from Spain, Germany, and Canada.(Celtenham: Edward Elgar Publishing Limited), pp. 56-73.
Brezovnik, B. & Oplotnik, Ž. J. (2014) Fiscal decentralisation in Slovenia (Maribor: Institute for Local Self-Government and Public Procurement Maribor).
Clark, G. L. (1984) A theory of local autonomy, Annals of the Association of American Geographers, 74(2), pp. 195-208.
Crasneac, A., Hetes Gavra, R. & Oana, M. (2011) Fiscal decentralization and fiscal autonomy in the EU member states, Annals of Faculty of Economics, University of Oradea, 1(1), pp. 370-375.
Dahlby, B. & Warren, N. (2003) Fiscal incentive effects of the Australian equalisation system. The Economic Record, 79(247), pp. 434-445.
Eyraud, L. & Lusinyan, L. (2011) Decentralizing spending more than revenue: Does it hurt fiscal performance?, Working Paper No. 226 (Washington DC: International Monetary Fund).
Greenberg, J. (1977) Existence of an equilibrium with arbitrary tax schemes for financing local public goods, Journal of Economic Theory, 16, pp. 137–150.
Hemmings, P., Turner, D. & Parvianen, S. (2003) Enhancing the effectiveness of public spending in Finland, OECD Economics Department Working Papers, 349 (Paris: OECD).
Henderson, J. (1991) Separating tiebout equilibria, Journal of Urban Economics, 29, pp. 128–152.
Joumard, I. & Kongsrud, P. M. (2003) Fiscal Relations across Government Levels (Paris: OECD).
Ladner, A., Keuffer, N. & Baldersheim, H. (2016) Local autonomy index for European countries (1990-2014), Regional & Federal Studies, 26(3), pp. 321-357.
Oates, W.E. (1972) Fiscal federalism (New York: Harcourt Brace Jovanovich).
OECD (1999) Taxing powers of state and local government, OECD Tax Policy Studies, 1, p. 11.
OECD/KIPF (2016) Fiscal federalism 2016: Making decentralisation work (Paris: OECD Publishing), https://doi.org/10.1787/9789264254053-en.
Page, E. & Goldsmith, M. (1987) Central and local government relations (Thousand Oaks: Sage).
Pratchett, L. (2004) Local autonomy, local democracy, and the “new localism”, Political Studies, 52, pp. 358-375.
Rodden, J. A. (2002) The dilemma of fiscal federalism: Grants and fiscal performance around the world, American Journal of Political Science, 46, pp. 670–687, https://doi.org/10.2307/3088407.
Stegărescu, D. (2005) Public sector decentralization: Measurement concepts and international trends, Fiscal Studies, 26(3), pp. 301-333.
Swianiewicz, P. & Łukomska, J. (2013) Local tax policies in the limited autonomy of the revenue collection system in Poland In: Kim, J., Lotz, J. & Mau, N. J. (eds.) Interaction between local expenditure responsibilities and local tax policy (Seoul: The Korea Institute of Public Finance and The Ministry for Economic Affairs and the Interior), pp. 255-278.
Tiebout, C. (1956) A pure theory of local expenditures, Journal of Political Economy, 64, pp. 416–424.
Tselios, V., Rodriguez-Pose, A., Pike, A., Tomaney, J. & Torris, G. (2012) Income inequality, decentralisation, and regional development in western Europe, Environment and Planning A, 44, pp. 1278-1301.
Van Rompuy, P. (2015) Sub-national tax autonomy and deficits: Empirical results for 27 OECD Countries, Regional Studies, 50(7), pp. 1248-1259, https://doi.org/10.1080/00343404.2015.1007937.
Vetter, A. (2007) Local politics: A resource for democracy in western Europe? Local autonomy, local integrative capacity, and citizens’ attitudes towards politics (Lanham: Lexington Books).
Wolman, H. (2008) Comparing local government systems across countries: Conceptual and methodological challenges to building a field of comparative local government studies. Environment and Planning C: Government and Policy, 26, pp. 87-103.
Wooders, M. (1978) Equilibria, the core, the jurisdiction structures in economies with a local public good, Journal of Economic Theory, 18, pp. 328–348.
Wurzel, E. (2003) Consolidating Germany's finances: Issues in public sector spending reform, Economics Department Working Paper, No 366 (Paris: OECD).
