Tax interaction dynamics among Belgian municipalities, 1984-1997

The purpose of this paper is to test econometrically the existence of fiscal interactions between Belgian municipalities. At the time of writing, the motivation was to provide scientific support to the lively debate on fiscal competition that took place among Belgian politicians in the late nineties. Two types of taxes are considered, for which Belgian municipalities have the decision power as to rates: the 'centimes additionnels' on the personal income tax and the 'pr©♭compte immobilier' which is a property tax. A dynamic adjustment model is specified and estimated using panel data for 598... Mehr ...