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Unformatted text preview: s imposes a constraint on their taxation power. In
Switzerland, the proportions have been fairly stable for 30 years for the Confederation, the cantons and the communes.
The cantons’ share of total revenue rose after World War 2 and has remained stable since. A fiscal harmonization law
has slightly reduced the autonomy of the cantons, though Bernard Dafflon notes that the cantons successfully pressured
the Confederation to ensure that the scope of such harmonization remains limited. Far from leading to convergence of
rates, such harmonization is essentially limited to setting the framework in which the cantons must define their direct
taxes and standardize filing forms.
In Germany, the federation has only limited exclusive authority over taxation (customs duties and tax monopolies). As for
other taxes, the Länder parliaments have jurisdiction as long as the federal Parliament does not exercise its jurisdiction.
In practical terms, tax legislation is mainly federal, and tax administration is decentralized: the Länder in particular are
charged with collecting shared taxes (personal income tax, corporate income tax, value-added tax or VAT). Such
decentralized tax collection also exists in Spain, in the case of the two foral regime autonomous communities, Navarre
and the Basque Country. They collect almost all taxes within their territory and pay the cupo, i.e. their share for services
provided, to the central government.
In many countries, various measures have been (or are currently being) implemented to increase the autonomous fiscal
resources of federated entities’ and regional governments. According to Robert Ebel, many countries in transition and
developing countries have undertaken some degree of tax decentralization. In Spain, the funding agreements of
autonomous communities provide them with growing autonomous fiscal resources. In Belgium, the Regions’ fiscal
autonomy is low, but rising. Greater fiscal autonomy for the Regions, constantly demanded by Flanders, increased in
2001. In Italy, greater fiscal powers were granted to the regions in the 1990s. In the United Kingdom, the Scottish
Parliament now has the power to vary by 3% the basic rate of the income tax by (the tartan tax).
In our sample, Australia has gone its own way regarding decentralization of taxation. The states exercise their fiscal
autonomy within fairly limited fields. They are absent from the major sources of taxation. The federal monopoly in the
personal and corporate income tax field stems from the perpetuation of a “temporary” acquisition during World War 2 of
exclusive legislative power, while its monopoly over general consumption taxes results from a narrow interpretation of
the Constitution by the High Court. Accordingly, the states’ fiscal autonomy is fairly low, bearing in mind that Australia is
a relatively old federation (1901). The recent reform even reduced it somewhat, as we have seen. The shares of
government revenue of the Commonwealth, on the one hand, and the states and local administrations, on the other,
remained stable during the 1990s (73% and 27% respectively), but they have chang...
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