OECD Working Paper on Fiscal Federalism no. 29

Twenty years of tax autonomy across levels of government: Measurement and applications

Author

Sean Dougherty, Michelle Harding and Andrew Reschovsky

Abstract

The Network on Fiscal Relations has been assessing the degree of sub-central government tax autonomy in OECD countries for almost two decades. This paper provides an in-depth description of the methodology used to characterise tax autonomy. After summarizing the wide-spread use of the tax autonomy results by researchers addressing a range of policy issues, the paper highlights recent trends in sub-central government revenues and presents the results of the latest survey of tax autonomy, completed in 2017. Using the OECD’s tax autonomy methodology, the paper for the first time assesses local government tax autonomy in the 50 US states. The analysis reveals that US local governments have somewhat more tax autonomy than local governments in the average OECD country. The paper includes suggestions for further refinements of the tax autonomy methodology.

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OECD Working Paper on Fiscal Federalism no. 30

Population ageing and sub-central governments: Long-term fiscal challenges

Author

Céline Colin and Bert Brys

Abstract

The population in OECD countries is ageing rapidly, which will have significant macroeconomic impacts, including on public expenditure and tax revenues. This paper analyses the consequences of population ageing at the sub-central government (SCG) levels and introduces the ‘SCG fiscal vulnerability to ageing’ indicator. This indicator identifies the countries in which SCGs on average are “vulnerable” to the ageing of their population from a fiscal perspective (both from the expenditure and revenue side). The paper posits that the economic and fiscal consequences of an ageing population goes beyond the central-SCG boundaries. Therefore, in order to make fiscal frameworks “ageing-resilient”, countries require a coherent fiscal strategy, which focuses on tax and spending reforms, with a whole-of-government approach that brings together central governments and SCGs.

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OECD Science, Technology and Industry Working Paper 2019/06

Measuring R&D tax support: Findings from the new OECD R&D Tax Incentives Database

Author

Silvia Appelt, Fernando Galindo-Rueda and Ana Cinta González Cabral

Abstract

Investment in research and experimental development (R&D) is an important driver of innovation and economic growth. Over the past two decades, tax incentives have become a key policy instrument for promoting business R&D. This raises a number of policy questions: How has the role of tax incentives in the R&D support policy mix evolved across OECD countries and other major economies? How generous are tax relief provisions for different types of firms? How effective are they in stimulating business R&D investment?

The OECD R&D Tax Incentives Database (http://oe.cd/rdtax) aims to contribute to the data infrastructure available to policy makers and researchers to examine the use and impact of R&D tax incentives across OECD countries and partner economies. This paper provides a practical guide to using this new database, describing the recently released R&D tax incentive data and highlighting their potential for internationally comparative work through descriptive indicators and econometric analysis.

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