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Feasible taxation in advanced democracies

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Listed:
  • Leonardo Baggiani
  • Enrico Colombatto

    (Scuola di Management ed Economia)

Abstract

One usually considers tax pressure as the result of the policymakers’ efforts to increase public expenditure, while populism is resorted to in order to alleviate tensions among the taxpayers. This paper takes a different view. It assumes that populism is exogenous in the short run and defines the tolerable degree of tax pressure required to bring about redistribution; however, taxpayers also resent disappointing economic performances and low-quality public expenditure. Within this context, therefore, policymakers try to find a compromise between their desire to engage in rent-seeking and their electoral ambitions. This paper shows under which circumstances compromise is obtained, how tensions arise, and what outcomes the taxpayers’ reactions may generate.

Suggested Citation

  • Leonardo Baggiani & Enrico Colombatto, 2017. "Feasible taxation in advanced democracies," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(3), pages 213-229, September.
    • Handle: RePEc:spr:inrvec:v:64:y:2017:i:3:d:10.1007_s12232-016-0266-z
    DOI: 10.1007/s12232-016-0266-z
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal strategies; Populism; Rent-seeking;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • P17 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Performance and Prospects

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