commission on fiscal imbalance 合集

Federations like switzerland and germany sometimes

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Unformatted text preview: ic policy of a single canton that profit the residents of other cantons (financial agreements for university education, for instance). Federations like Switzerland and Germany sometimes give preference to horizontal cooperative mechanisms that do not depend on centralized involvement. These intergovernmental cooperative structures between federated entities also bolster their collective negotiating power with the federal government. For instance, in Switzerland, according to Bernard Dafflon: 9 10 Following this analysis, David Collins concludes that the increase in vertical fiscal imbalance following the 2000 reform of the fiscal arrangements will have harmful effects on the efficiency of resource allocation in Australia. We speak of “externalities” when the decentralized delivery of a public service generates benefits outside the borders of the territorial communities that provide them. 3 Commission on Fiscal Imbalance […] fiscal matter cannot be decided at the federal level without previous consultation of the CCMF [Conference of the Cantonal Ministers of Finance]. It is a powerful pressure group, regularly consulted by the federal Finance Administration. It has been successful in negotiating global financial packages in which the point of view of the cantons differs from that of the federal government. It has played an important role in shaping federal finance, the federal tax system and tax harmonisation, which was to remain ‘formal’, and has a dominant position in federal equalisation policies (p. 65). 2.2. Matching Revenue and Spending: Fiscal Autonomy and Transfers The benefits of decentralized delivery cannot be fully achieved unless supported by financial resources, without which decentralization would be devoid of meaning. Accordingly, it is necessary to match responsibilities for spending and sources of revenue as closely as possible. That is why all the texts deal with the crucial issue of funding of regional or federal political entities, as the case may be. Each country studied in the texts received has its own way of dealing with this issue. In practical terms, this matching takes various forms, each one corresponding to a greater or lesser degree of autonomy of the federated entities. The first is to ensure that these entities have access to their own sources of revenue, and that such access is constitutionally protected. The second is to provide them with federal cash transfers, consisting of grants from the federal budget, i.e. a share of tax proceeds of which at least some parameters are set by the federal government. 2.2.1. Fiscal Autonomy Fiscal autonomy assumes that the federated states have access to tax fields over which they exercise control. Such control may be total (definition of the tax base, establishment of the applicable rates and collection); this refers to “own taxes”. However, the control may be limited to control over setting rates applicable to a tax base defined by the federal 11 government; this refers to “joint taxes”. There are advantages to matching revenue and spending between orders of government in this way. Ideally, the gov...
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