Resumen

PONCE RODRIGUEZ, Raúl Alberto  y  PONCE RODRIGUEZ, Benito Alan. An Analysis of Optimal Tax Revenue Sharing for Mexico. Rev. mex. econ. finanz [online]. 2022, vol.17, n.2, e523.  Epub 28-Oct-2022. ISSN 2448-6795.  https://doi.org/10.21919/remef.v17i2.523.

We develop an analysis that identifies the characteristics of an optimal system of shared tax collection and intergovernmental transfers. Mathematical optimization is used to find the level of taxes and intergovernmental transfers. Formulas for the optimal level of taxes and transfers to subnational governments are characterized. We suggest reforms to intergovernmental transfers to include the costs of tax inefficiency, some tax equalization transfer rules, and the marginal social benefits of local public spending. Future research could include local public spending with regional externalities, migration, and consider a dynamic model. This article proposes an original theoretical model of optimal tax coordination and transfers. The optimal level of taxes and transfers are identified. This paper proposes reforms to the participation formula for subnational governments.

Palabras llave : H2; H7; H72; H77; Tax revenue sharing; optimal taxation; state and local expenditures; fiscal federalism.

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