commission on fiscal imbalance 合集

Sectoral and national agreements called intersectoral

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Unformatted text preview: p to the study by De Boeck and Van Gompel (1998),” writes Docquier (1999, our translation), “many studies have attempted to estimate the scope of interregional solidarity by breaking down public spending aggregates. […] Substantial amounts have been put forward. […] De Boeck and Van Gompel (1998) conclude that 186.5 billion BEF (4.6 billion €) were transferred in 1996 from Flanders to Wallonia.” Three main causes can explain these transfers: differences in economic performance and, therefore, in ability-to-pay, demographic structure (the population of Wallonia is older), and health care spending habits (the Walloons spend more in respect of a given objective risk). Cattoir and Docquier (1999, our translation) estimate these transfers at 68.9 billion BEF (1.7 billion €) to Wallonia and 23.2 billion BEF (575 million €) to Brussels. These authors suggest that “most of the implicit transfer stems from differences in ability-to-pay. Less than 20% of these transfers are attributable to differences in spending.”9 The following data, drawn from Docquier (1999), illustrate the foregoing observations. They complete the data presented in Table 1 and also support the comments of the Conseil Supérieur des Finances (1999). 5 6 7 8 9 See B. Delhausse and S. Perelman, 1998, also reproduced in Docquier (editor), 1999. On this point, B. Delhausse and S. Perelman refer to B. Cantillon, I. Marx and K. Van den Bosch, 1997. See A.B. Atkinson, L. Rainwater and T. M. Smeeding, 1995. Salaries in Belgium result largely from collective agreements negotiated between workers’ and employers’ representatives in a business, industry sector or the country overall and not the region. Sectoral and national agreements, called “intersectoral” agreements, are imposed by law on all businesses. According to some experts, including permanent Deputy Minister for Social Affairs M. Jadot, there are major differences between Eastern and Western parts of the country than between Northern (Flemish Region) and Southern (Walloon Region) parts. 177 Commission on Fiscal Imbalance TABLE 2 REGIONAL INDICATORS (% of the total) Walloon Region Brussels-Capital. Flemish Region Belgium as a whole 32.7 24.9 30.4 28.9 16.3 24.9 1.58 1.13 13.3 9.2 14.5 8.6 9.1 17.4 23.1 1.28 0.57 16.5 58.1 60.6 61.0 62.0 15.6 23.7 2.47 1.59 5.3 100 100 100 100 16.0 24.0 2.03 1.28 8.9 Population, 1999 GDP, 1996 Taxable, 1996 Tax, 1996* 65 and over, 1996 20 and under, 1996 GDP growth 85-96 GDP growth, 91-96 Unemployment, 98 * Personal income tax (impôt des personnes physiques or IPP). Source: Docquier (1999). For that latter agency, Belgian federalism cannot be studied without taking into account nine of the country’s characteristics: the open nature of its economy, its high indebtedness ratio, its high tax pressure, unequal distribution of added value among the Regions, changes in taxable income to the detriment of Brussels and in favour of Flanders, differences in the evolution of the real estate market (more at the level of the “arrondissements” than the Regions), more extensive...
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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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