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Some Aspects of Rural Municipal Finance

Some Aspects of Rural Municipal Finance <jats:p>This paper is concerned with <jats:italic>rural</jats:italic> local government, and particularly with the equalization feature of grants to local governments. Reference is made to the Alberta situation.</jats:p><jats:p><jats:italic>Significant Differences between Urban and Rural Municipalities</jats:italic>. The position of the rural municipality is significantly different from that of its urban counterpart. The basic difference is in fiscal capacity. Fiscal capacity is financial ability, within the taxing powers provided, to perform the functions for which the municipality is responsible.</jats:p><jats:p>All taxes are ultimately paid out of income. Rural per capita income is relatively low; disparities in income are less pronounced; production and income are more variable and uncertain; and income produced in rural areas is largely spent within urban jurisdictions. Consequently taxable capacity is lower; and certain forms of taxes (for example, income taxes, sales taxes, and amusement taxes), efficient and appropriate under urban conditions, would be unproductive and uncertain sources of revenue under rural circumstances. The fiscal capacity of rural units is further affected by population dispersion so that the costs of some services, frequently sources of net revenue to urban governments, are high or prohibitive in rural areas.</jats:p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Canadian Journal of Economics and Political Science CrossRef

Some Aspects of Rural Municipal Finance

Canadian Journal of Economics and Political Science , Volume 14 (4): 481-490 – Nov 1, 1948

Some Aspects of Rural Municipal Finance


Abstract

<jats:p>This paper is concerned with <jats:italic>rural</jats:italic> local government, and particularly with the equalization feature of grants to local governments. Reference is made to the Alberta situation.</jats:p><jats:p><jats:italic>Significant Differences between Urban and Rural Municipalities</jats:italic>. The position of the rural municipality is significantly different from that of its urban counterpart. The basic difference is in fiscal capacity. Fiscal capacity is financial ability, within the taxing powers provided, to perform the functions for which the municipality is responsible.</jats:p><jats:p>All taxes are ultimately paid out of income. Rural per capita income is relatively low; disparities in income are less pronounced; production and income are more variable and uncertain; and income produced in rural areas is largely spent within urban jurisdictions. Consequently taxable capacity is lower; and certain forms of taxes (for example, income taxes, sales taxes, and amusement taxes), efficient and appropriate under urban conditions, would be unproductive and uncertain sources of revenue under rural circumstances. The fiscal capacity of rural units is further affected by population dispersion so that the costs of some services, frequently sources of net revenue to urban governments, are high or prohibitive in rural areas.</jats:p>

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Publisher
CrossRef
ISSN
0315-4890
DOI
10.2307/137832
Publisher site
See Article on Publisher Site

Abstract

<jats:p>This paper is concerned with <jats:italic>rural</jats:italic> local government, and particularly with the equalization feature of grants to local governments. Reference is made to the Alberta situation.</jats:p><jats:p><jats:italic>Significant Differences between Urban and Rural Municipalities</jats:italic>. The position of the rural municipality is significantly different from that of its urban counterpart. The basic difference is in fiscal capacity. Fiscal capacity is financial ability, within the taxing powers provided, to perform the functions for which the municipality is responsible.</jats:p><jats:p>All taxes are ultimately paid out of income. Rural per capita income is relatively low; disparities in income are less pronounced; production and income are more variable and uncertain; and income produced in rural areas is largely spent within urban jurisdictions. Consequently taxable capacity is lower; and certain forms of taxes (for example, income taxes, sales taxes, and amusement taxes), efficient and appropriate under urban conditions, would be unproductive and uncertain sources of revenue under rural circumstances. The fiscal capacity of rural units is further affected by population dispersion so that the costs of some services, frequently sources of net revenue to urban governments, are high or prohibitive in rural areas.</jats:p>

Journal

Canadian Journal of Economics and Political ScienceCrossRef

Published: Nov 1, 1948

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