Tax or yardstick competition?: evidence from gasoline and cigarette US taxation

• Autores: Alejandro Esteller Moré, Leonzio Rizzo
• Localización: XVII Encuentro de Economía Pública: políticas públicas ante la crisis, 2010, pág. 91
• Idioma: inglés
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• Resumen

  • We test for tax interaction for gasoline and cigarette taxation for the US case (1975-2006). We estimate a tax reaction function, and obtain that tax interaction is only due to yardstick competition, as interaction vanishes for lame-duck governors. This result holds for both taxes: the (short run) reaction of those states which governor can run for reelection is 0.16 and 0.21 for gasoline and cigarette taxation, respectively.