commission on fiscal imbalance 合集

The flows of funds resulting from the equalization

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Unformatted text preview: egard, Robert Ebel draws certain different conclusions, but his analysis mainly looks at the situation prevailing in developing countries and countries in transition to a market economy. Commission on Fiscal Imbalance federal bodies that need, given the role of the Bundesrat, prior agreement from the various governments. The flows of funds resulting from the equalization calculations are computed using data provided by the Länder, which are responsible for collecting taxes. Transfers among the Länder – equalization – are distributed following complex 19 calculations using known formulas and readily accessible statistics. The equalization formula must satisfy the requirements of the Constitution (uniformity of living conditions for Germans throughout the federation) and of a socalled equalization “general standards” law (Maβstäbegesetz) passed in July 2001, in response to a decision of the Constitutional Court. Lastly, the new agreement reached in 2001 governs financial relations for a period of 15 years (2005-2019). In Australia, the amount of the unconditional transfer envelope is automatically determined by the proceeds of the GST, which applies at a rate of 10% to a broad base. In addition, during a transition phase, a revenue guarantee system 20 applies, ensuring that no state is financially worse off following the reform. The operating rules of this tax, whose proceeds are paid entirely to the states, can only be changed if there is unanimous agreement of the two houses of the federal Parliament, the federal government and the state Parliaments. Their distribution stems from the calculation of “relativities”, which is a highly complex process, but the integrity and transparency of the process of applying the formula are guaranteed by an independent body, the Commonwealth Grants Commission (CGC). The appointments and consultations of this body, often public, actively involve the governments of the states and territories and its recommendations, rarely questioned, are the subject of open intergovernmental discussions. In Belgium, the rules for adopting transfer programs to the Regions and Communities are those that apply for special laws, i.e. a two-thirds majority in both houses and a majority in each linguistic group of the two federal houses. Transfer amounts and the sharing rules for shared taxes were initially set on historical bases. For instance, under the VAT and personal income tax vertical sharing rules, the amounts initially transferred to fund new jurisdictions of federated entities were equivalent to the amounts allocated to these items in the federal budget. Indexation of the total amounts and changes in the distribution among the Regions and Communities were defined for a period of ten years. The new funding agreements, based on education needs in the case of the Communities, also stipulate indexation and distribution mechanisms. In the case of Regions, personal income tax is shared initially on a territorial basis, amounts being returned to where they were collected, and then redistributed among the Regions according to a very simple equalization formula, to reduce the result...
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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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