Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009
The main objective of this study is to quantify the impact caused by changes in federal tax on the tax policy of the Brazilian states, considering the presence of horizontal tax competition between states. Using panel data covering 26 Brazilian states plus the Federal District during the period 1995...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2015-01-01
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| Series: | EconomiA |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S1517758015000089 |
| _version_ | 1818500636754313216 |
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| author | Rodolfo Herald da Costa Campos Roberto Tatiwa Ferreira Rafael Kloeckner |
| author_facet | Rodolfo Herald da Costa Campos Roberto Tatiwa Ferreira Rafael Kloeckner |
| author_sort | Rodolfo Herald da Costa Campos |
| collection | DOAJ |
| description | The main objective of this study is to quantify the impact caused by changes in federal tax on the tax policy of the Brazilian states, considering the presence of horizontal tax competition between states. Using panel data covering 26 Brazilian states plus the Federal District during the period 1995–2009, two models were estimated representing the average reaction of the states in response to changes in federal tax rates. In the first model, both levels of government act simultaneously, whereas in the second model, reaction is sequential, with the federal government acting as the leader in defining its effective tax rates. The results indicate a positive and significant response of states to increases in the federal tax rate, resulting in an over-taxation of the common tax base and higher tax rates. Additional tests show that the first model is the most suitable to represent the problem analysed. |
| first_indexed | 2024-12-10T20:45:26Z |
| format | Article |
| id | doaj.art-d7d3b282aaef491eb2350c1d045348d2 |
| institution | Directory Open Access Journal |
| issn | 1517-7580 |
| language | English |
| last_indexed | 2024-12-10T20:45:26Z |
| publishDate | 2015-01-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | EconomiA |
| spelling | doaj.art-d7d3b282aaef491eb2350c1d045348d22022-12-22T01:34:15ZengEmerald PublishingEconomiA1517-75802015-01-0116111112710.1016/j.econ.2015.03.004Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009Rodolfo Herald da Costa Campos0Roberto Tatiwa Ferreira1Rafael Kloeckner2Graduate Program in Economics, Federal University of Ceará (CAEN/UFC), BrazilDepartment of Applied Economics, Federal University of Ceará (CAEN/UFC), BrazilGraduate Program in Economics, Federal University of Ceará (CAEN/UFC), BrazilThe main objective of this study is to quantify the impact caused by changes in federal tax on the tax policy of the Brazilian states, considering the presence of horizontal tax competition between states. Using panel data covering 26 Brazilian states plus the Federal District during the period 1995–2009, two models were estimated representing the average reaction of the states in response to changes in federal tax rates. In the first model, both levels of government act simultaneously, whereas in the second model, reaction is sequential, with the federal government acting as the leader in defining its effective tax rates. The results indicate a positive and significant response of states to increases in the federal tax rate, resulting in an over-taxation of the common tax base and higher tax rates. Additional tests show that the first model is the most suitable to represent the problem analysed.http://www.sciencedirect.com/science/article/pii/S1517758015000089Fiscal federalismTax competitionHorizontal and vertical tax externalitiesReaction functions |
| spellingShingle | Rodolfo Herald da Costa Campos Roberto Tatiwa Ferreira Rafael Kloeckner Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009 EconomiA Fiscal federalism Tax competition Horizontal and vertical tax externalities Reaction functions |
| title | Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009 |
| title_full | Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009 |
| title_fullStr | Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009 |
| title_full_unstemmed | Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009 |
| title_short | Vertical tax competition in Brazil: Empirical evidence for ICMS and IPI in the period 1995–2009 |
| title_sort | vertical tax competition in brazil empirical evidence for icms and ipi in the period 1995 2009 |
| topic | Fiscal federalism Tax competition Horizontal and vertical tax externalities Reaction functions |
| url | http://www.sciencedirect.com/science/article/pii/S1517758015000089 |
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