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Capital Tax as a Consequence of Bargaining

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  • Saito, Yuta

Abstract

We study an OLG model in which heterogenous agents bargain over capital taxation. In our model, both of the balance of bargaining power and threat point, that standard median voter models have not considered, are endogenized. We show that the two key features are crucial determinants for political as well as economic outcomes.

Suggested Citation

  • Saito, Yuta, 2015. "Capital Tax as a Consequence of Bargaining," MPRA Paper 65338, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65338
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    File URL: https://mpra.ub.uni-muenchen.de/65338/1/MPRA_paper_65338.pdf
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    3. Alessandro Riboni & Facundo Piguillem, 2011. "Dynamic Bargaining over Redistribution in Legislatures," 2011 Meeting Papers 1320, Society for Economic Dynamics.
    4. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    5. Marco Bassetto, 2008. "Political Economy of Taxation in an Overlapping-Generations Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 18-43, January.
    6. Baron, David P., 1996. "A Dynamic Theory of Collective Goods Programs," American Political Science Review, Cambridge University Press, vol. 90(2), pages 316-330, June.
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    More about this item

    Keywords

    Legislative bargaining; wealth inequality; capital taxation;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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