Conventional wisdom has it that the value-added tax is not a suitable instrument for lower-level jurisdictions ('provinces') in a federal system. The problems that arise when it is so used have become a serious constraint on the development of the VAT - and closer economic integration - in...

Conventional wisdom has it that the value-added tax is not a suitable instrument for lower-level jurisdictions (‘provinces’) in a federal system. The problems that arise when it is so used have become a serious constraint on the development of the VAT—and closer economic integration—in...

Optimal tax models, starting from Ramsey (1927), are often studied using a single government. However, there are several countries which are federations and in that multiple levels of government have fiscal authority, which masks the heterogeneity across states. In this paper we study a...