Published online by Cambridge University Press: 03 July 2017
Cross-border commercial activity raises issues in federations where multiple jurisdictions can claim the right to tax the same income. In the United States, this coordination problem is resolved by splitting the tax base according to the geographic distribution of firms’ sales, capital and labour. The weight of each factor is determined on a state-by-state basis, which opens room for competitive legislative behaviour. In this complex issue area, however, policymakers must invest lot of resources to monitor competitors, evaluate policy alternatives and shepherd tax reform through the legislative process. This implies that highly professional legislatures should be more responsive to the policies of nearby states. We consider data on most American states over the period from 1986 to 2013 and find strong evidence of conditional spatial dependence. Our findings suggest that policy diffusion may often be moderated by institutional and political factors.
To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you used this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about saving content to Dropbox.
To save this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you used this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about saving content to Google Drive.