Tax equalization

Abstract: Federal-Provincial Tax Equalization: An Evaluation. The Canadian scheme for transferring revenues from Ottawa to the poorer provinces is cast in an algebraic framework and then evaluated, both on an empirical and analytical level. Included is a sensitivity analysis designed to answer questions such as the effect on Saskatchewan's equalization payments of an increase in Nova Scotia's sales tax. Included also is a discussion of the possibility for provincial strategies under the scheme. Several alternative formulations for equalization are also presented and evaluated. The final substantive section of the paper focuses on the funding of the scheme.

Abstract: The Nordic countries have decentralized government spending more than any other country and consequently the local public sector needs more financing. This is generally solved by income tax revenue sharing systems and central government grants. Another characteristic is the emphasis on tax equalization. While this centralized financing generates considerable revenue for the local governments, the design implies vertical fiscal imbalance and a challenge for local accountability. Overall the system is better understood as public sector decentralization than traditional fiscal federalism. The Nordic countries represent an interesting puzzle in local government financing. The financing of local governments must be arranged nationally when decentralization is extensive. The resulting degree of local autonomy varies, and the local discretion in income taxation in Denmark and Sweden seems to help strengthen the locals. But all the Nordic countries struggle with the balance between central government control and local self rule.

Abstract: Germany, a socially homogenous federation, with a centralized party system, developed close cooperation between governments: central to state and state to state, facilitated by the hobnobbing of bureaucrats and politicians. Tax equalization headed off regional movements, so conflicts were really between parties because party ideologies and programs make a difference. Federalism acted as a barrier to rapid change.

Abstract: The equalization criterion is important in relation to the real estate tax. The amount that the taxpayer must pay to the government should be commensurate with the current market value of the asset. In several European Countries, including Italy, the real estate tax is based on cadastral incomes, which often do not express the assets real market value. The evaluation model proposed in this study, developed following the evaluation logic of typical values procedure, aims to get to tax equalization by revising tax rates according to market information properly collected from datasets provided by private or public agencies. The model is set-up following these stages: analysis of the price formation mechanisms for urban properties and choice of evaluation process; selection of real estate features needed to achieve the tax equalization aims; data collection; definition of value function; calculus of the Municipal Property Tax; model calibration. The validity of the model is demonstrated by a case study application carried out on a wide urban area in which are situated about 500 real estate units.