Due to the Growth and Stability Pact, Local and Regional governments face an hard
budget constraint, thus they have to levy taxes to finance their expenses. This paper measures the incidence of the fiscal policies levied in Marche Region on income. We run the analysis using a biregional CGE model, Marche vs Rest of Italy, which let us evaluate the impact of regional taxes (regional additional on IRPEF and IRAP), of local taxes (comunal additional on IRPEF and ICI) and of tariff (gas, water and waste) on income. Comparative static exercises show that the impact on income comes mainly from
regional taxes. The overall effective tax rate shows an U shape with respect to income. The U shape depends on two regional taxes: on the strong progressivity of regional additional on IRPEF applied by Marche explains the high pressure on higher income; and on the effective tax burden of IRAP which affects the workers with lower income and not firms that legally pay it.