commission on fiscal imbalance 合集

First the cantons and the communes must know how much

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Unformatted text preview: stage, that tax harmonisation does not imply perfect uniformity in the rates and forms of taxation across the jurisdictions. The consequences of cantonal, and to some extent communal, tax autonomy is that the tax burden can differ substantially from one jurisdiction to another according to their view about the tax system, the combination of the ability-to-pay and the benefit principles, and the progressiveness of the rate schedules. Additional reasons are that the Cantons provide varying levels of consumption of public services and have significant differences in the unit cost of providing public services at comparable minimum standards. The Cantons have also significant differences in levels of income and wealth (computed from Table 1, indices of per capita NIC in individual cantons vary between 70 points in Jura and 154 points in Zoug compared to an average of 100 points). It is in the nature of fiscal federalism that the use of non-benefit taxation by decentralised levels of government, cost differences in public provision and wide variations in NIC introduce disparities in the tax liabilities and, with it, some inefficiencies and inequalities. This is to be expected and can be accepted as far as "efficiency" is not only "economic" but refers to the general capacity of federal institutions to strengthen the system of checks and balances (as, for example, against autonomy; WISEMAN, 1990, p. 120) and as far as those disparities are not too blunt and remain within politically acceptable limits. But significantly higher tax rates (and maybe inferior public services) in some poorer jurisdictions may lead to the need for substantial equalisation payments (next section). Table 9 gives the indices of tax burden for five categories of taxes in the Cantons and the communes, which together amount to about 90 per cent of total cantonal and communal fiscal revenues. Reliable measures of the relative cantonal and communal tax burden are needed for several reasons. First, the Cantons and the communes must know how much revenue they are capable of raising without too heavy a tax burden in comparison with one another. Second, it is also important to have an idea of the ability and willingness of the Cantons and the Communes to raise revenue and, in relation to the requisite of a current balanced budget, to develop warning-systems of financial stress. Third, if equalisation is needed - it is argued - the recipient governments should not receive financial aid without a minimum effort in taxation. But, however useful these data may be, one must be careful in interpreting tax burden. Two government units may differ in their tax burden indices not only because they wish to provide different levels of public service (the "choice" model), but also because they use relatively different amounts of debt and non-tax revenues (user charges); differences may also reflect lower financial capacity (in NIC per capita) or differences in the unit cost of provision of public services. Table 9 shows that an individual can pay as much as twice or...
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This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

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