Local taxes as a tool of local economic development

The purpose of submitted paper is to evaluate economic dimension of local taxes and local taxation. The paper discusses the relation of economic and tax policy of municipality. It also contains a short legal analysis of local taxes as a tool of the municipal economic policy in the legal system of Slovak Republic. The most important part of the paper is a proposition of methodology for quantification the stabilizing function of the local taxes and its application in district towns of Slovak Republic. The results show that the stabilizing function implementation tax loss in case of the real estate tax in Slovak district towns is relatively non-significant and its volume is not influenced by a development of the current budget.