Abstract
The French taxe professionnelle, a business tax assessed on business wages and capital, is by far the most important tax levied by local governments in France. Because owners of businesses located in a given commune are for the most part located outside that commune, just as are the purchasers of goods produced by these businesses, and even (in urban areas) wage earners working in these businesses, a large share of the tax paid to a given local government is exported out, and borne by capital owners, consumers, and wage earners located in other jurisdictions. The magnitude of these leakages is estimated from a study of 38 French communes. Some implications of tax exportability are discussed. It is concluded that, for a local tax, exportability may not be as great as is generally argued.