Local Income, Sales, and Environmental Taxes

Abstract

This chapter considers local income, sales, and environmental taxes. Personal income and sales taxes are major local taxes in only a handful of countries and they are often (but not always) supplemental to local property taxes. Their attractiveness often depends on the services to be funded and alternative revenues. While not as good as the property tax in meeting the criteria for a solid local tax, they have positive features. Relevant issues include local administration versus piggybacking, setting local rates versus tax sharing, limits or no limits on tax rates, cross-border effects, harmonization with senior governments, and capacity to generate revenue. Although comparatively small but of potential importance, environmental taxes are also reviewed.