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Populism and Fiscal Illusion

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  • Sinclair Davidson

Abstract

There is a widespread concern that anti‐elitist or populist opinion is on the rise. The policy concern is that political opportunists would exploit voter rational ignorance for their own cynical purposes. In this article I demonstrate that, in the field of taxation, this sort of behaviour already occurs. Fiscal illusion can be described as deceiving taxpayer‐voters into paying more tax than they would otherwise agree to. Taxpayers are already victims of political opportunism unrelated to the rise of populism.

Suggested Citation

  • Sinclair Davidson, 2018. "Populism and Fiscal Illusion," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 51(3), pages 418-425, September.
    • Handle: RePEc:bla:ausecr:v:51:y:2018:i:3:p:418-425
    DOI: 10.1111/1467-8462.12296
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    References listed on IDEAS

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    1. Davidson, Sinclair & Fry, Tim R.L. & Jarvis, Kelly, 2006. "Direct democracy in Australia: Voter behavior in the choice between constitutional monarchy and a republic," European Journal of Political Economy, Elsevier, vol. 22(4), pages 862-873, December.
    2. Bryan Caplan, 2007. "Introduction to The Myth of the Rational Voter: Why Democracies Choose Bad Policies," Introductory Chapters, in: The Myth of the Rational Voter: Why Democracies Choose Bad Policies, Princeton University Press.
    3. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
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    Cited by:

    1. Brad R. Taylor, 2020. "The psychological foundations of rational ignorance: biased heuristics and decision costs," Constitutional Political Economy, Springer, vol. 31(1), pages 70-88, March.
    2. Jante Parlevliet & Massimo Giuliodori & Matthijs Rooduijn, 2021. "Populist attitudes, fiscal illusion and fiscal preferences: evidence from Dutch households," Working Papers 731, DNB.
    3. Jante Parlevliet & Massimo Giuliodori & Matthijs Rooduijn, 2023. "Populist attitudes, fiscal illusion and fiscal preferences: evidence from Dutch households," Public Choice, Springer, vol. 197(1), pages 201-225, October.

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