To assemble to resemble? A study of tax disparities among French municipalities

• Autores: Marie-Laure Breuillé, Pascale Duran Vigneron, Samson Anne-Laure
• Localización: Documents de treball IEB, Nº. 13, 2011, 37 págs.
• Idioma: inglés
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• Resumen

  • The purpose of this paper is to analyze the effect of inter-municipal cooperation on local taxation. Municipalities that join/create an inter-municipal jurisdiction choose between three tax regimes, which may induce both horizontal and vertical tax externalities. Using the differences in differences method with a quasi-exhaustive panel for French municipalities over the 1994-2010 period, we show a positive causal effect of cooperation on the level of cumulative tax rates (i.e. the sum of municipal and inter-municipal tax rates). Moreover, we show that cooperation leads to a convergence of tax rates within an inter-municipal structure, which thus reduces tax disparities among municipalities.