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The Role of Home Production in Voting Over Taxes and Expenditure

Author

Listed:
  • John Creedy

    (The University of Melbourne)

  • Solmaz Moslehi

    (The University of Melbourne)

Abstract

This paper investigates, first, how allowance for subsistence activities, or home production, affects the standard results in models involving the majority choice of the tax rate in a flat tax – basic income scheme. The paper extends the analysis of home production to choices regarding the composition of government expenditure, in situations where there is a tax-financed pure public good in addition to a transfer payment, conditional on a given tax rate. The effect of home production is to reduce the transfer payment in each model, but the effect is small.

Suggested Citation

  • John Creedy & Solmaz Moslehi, 2010. "The Role of Home Production in Voting Over Taxes and Expenditure," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(1), pages 81-97.
    • Handle: RePEc:ozl:journl:v:13:y:2010:i:1:p:81-97
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    References listed on IDEAS

    as
    1. Borge, Lars-Erik & Rattso, J.Jorn, 2004. "Income distribution and tax structure: Empirical test of the Meltzer-Richard hypothesis," European Economic Review, Elsevier, vol. 48(4), pages 805-826, August.
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    3. Peter Bearse & Gerhard Glomm & Eckhard Janeba, 2001. "Composition of Government Budget, Non‐Single Peakedness, and Majority Voting," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 3(4), pages 471-481, October.
    4. Hindriks, Jean & Myles, Gareth D., 2013. "Intermediate Public Economics," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262018691, December.
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    6. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
    7. Creedy, John & Moslehi, Solmaz, 2009. "Modelling the composition of government expenditure in democracies," European Journal of Political Economy, Elsevier, vol. 25(1), pages 42-55, March.
    8. Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
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    10. repec:bla:jpbect:v:3:y:2001:i:4:p:471-81 is not listed on IDEAS
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    More about this item

    Keywords

    Fiscal Policies; Behaviour of Economic Agents; Household Public Goods; National Government Expenditures and Related Policies: General; Time Allocation and Labour Supply;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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