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Higher local taxes a threat to jobs

Overman, Henry G. ORCID: 0000-0002-3525-7629 (2011) Higher local taxes a threat to jobs. Spatial Economics Research Centre Blog (23 Sep 2011). Website.

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Writing about the UK government’s consultation on Local Government Finance reform a couple of months ago, SERC affiliate Teemu Lyytikäinen talked about the fact that government had no intention of allowing councils to set their own business tax rates. He argued that the problem was partly political, but that the bigger issue is that it’s not clear what the effects of full localisation would be. There are several main fears. One is a race to the bottom – local authorities undercutting their competitors and undermining tax basis. The other fears relate to the opposite scenario, a `race to the top'. Would some councils set very high tax rates and waste the revenues on useless programmes and bureaucracy? Would these very high tax rates bring more pain to firms already struggling in the face of the recession? Some of my recent research, published in the Economic Journal this week, provides evidence that this fear is to some extent justified.

Item Type: Online resource (Website)
Official URL:
Additional Information: © 2011 The Author(s)
Divisions: Geography & Environment
Spatial Economics Research Centre
Centre for Economic Performance
What Works Centre
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
J Political Science > JC Political theory
J Political Science > JN Political institutions (Europe) > JN101 Great Britain
J Political Science > JS Local government Municipal government
Date Deposited: 29 Jun 2017 11:37
Last Modified: 04 Oct 2023 10:24

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