Local taxation on households: an analysis at municipal level

This paper provides an analysis of the local taxation on households in Italian provincial capitals between 2012 and 2015, the period immediately before a ceiling was imposed on the main local rates, relating it to a set of indicators available at the same geographical level. We provide information on regional, provincial and municipal duties imposed on a representative household, whose characteristics (regarding income, number and age of members, real estate holdings and consumption) remain unchanged throughout the country. The results show that taxation is higher for households living in the South, in regions under ordinary statutes (RSO) compared with those under special statutes (RSS), and in larger cities. Moreover, there is evidence of heavier taxation in places where local governments are (or have been) in financial distress or appear to be less efficient. In these areas, local taxation on households rose at a higher rate during the period covered by the analysis.