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Article Dans Une Revue Journal of Public Economic Theory Année : 2019

Commuting in Happyville: Taxation with interjurisdictional commuting and pollution

Résumé

This paper presents a spatial model of tax competition in an asymmetric duocentric city with traffic‐related pollution. Jurisdictions differ in productivity and both wage or commuting and head taxes are applied. Residential location is given, but agents can choose their workplace. We show that the incentive for the high productive jurisdiction to export the tax burden by attracting cross‐commuters is reduced by the resulting pollution import; this affects the welfare impacts of tax competition. The possibility that households may misperceive their exposure to pollution is explored and its impact of fiscal competition is analyzed. When households are very optimistic about their exposure, aggregate welfare may be higher than in the first best.
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Dates et versions

hal-02171432 , version 1 (02-07-2019)

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Sophie Legras. Commuting in Happyville: Taxation with interjurisdictional commuting and pollution. Journal of Public Economic Theory, 2019, 21 (2), pp.201-218. ⟨10.1111/jpet.12342⟩. ⟨hal-02171432⟩

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