Strategic Tax Competition in Switzerland: Evidence from a Panel of the Swiss Cantons

By Lars P. Feld, Emmanuelle Reulier. Social Science Research Network, 2009

159 citations recorded by the source corpus.

Abstract Tax competition is discussed as a source of inefficiency in international taxation and in fiscal federalism. Two preconditions for the existence of such effects of tax competition are that mobile factors locate or reside in jurisdictions with - ceteris paribus - lower tax rates, and that taxes are actually set strategically in order to attract mobile production factors. It is well known from studies about Swiss cantonal and local income tax competition that Swiss taxpayers reside where income taxes are low. In this paper, empirical results on strategic tax setting by cantonal governments are presented for a panel of the Swiss cantons from 1984 to 1999. Completing the evidence on Swiss tax competition, income tax rates in cantons are the lower, the lower the tax rates of their neighbors.

Subfields: Accounting, Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/2a19c46e4308ff7ed22aabe26758ab18165ab71a

Citations in the corpus

• WHAT DO WE KNOW ABOUT CORPORATE TAX COMPETITION? (2013, unknown): “See for example Feld and Reulier (2008) for an investigation of strategic interaction in the setting of personal income tax rates in Swiss Cantons.”
• Tax Mimicking and Yardstick Competition Among Local Governments in the Netherlands (2005, unknown): “Feld and Reulier (2003) Cantons, Switzerland Personal income tax IV 0.42‐1.07 Bordignon, Cerniglia and Revelli (2003) Municipalities, Lombardy (Italy) Business property tax (tax rates) ML 0.3 (spatial error model) Sol´ e Oll´ e (2003) Municipalities surrounding Barcelona (Spain) Property tax, local”
• Public spending interactions and local politics. Empirical evidence from French municipalities (2008, unknown): “These empirical results were obtained using European subnational governments datasets (for example, Heyndels and Vuchelen 1998, in Belgium; Buettner 2001, in Germany; Feld and Reulier 2005, in Switzerland; Bordignon et al. 2003, in Italy; Solé-Ollé 2003, in Spain, and Feld et al. 2002, in France), a”
• Mostly pointless spatial econometrics (2012, unknown): “Feld and Reulier (2009) use IV but do not discuss either problem.”
• Decentralized Taxation and the Size of Government: Evidence from Swiss State and Local Governments (2010, unknown): “The competing cantons are all cantons except the one of consideration weighted with the inverse of the distance (see Feld and Reulier, 2002 for a discussion of empirical studies).”