Political Economy of Taxation in an Overlapping-Generations Economy

Marco Bassetto

Review of Economic Dynamics, 2008, vol. 11, issue 1, pages 18-43

Abstract: This paper analyzes the effects of intergenerational conflict on capital and labor income tax rates, transfers, and government spending in a model of multidimensional policy choice. The different nature of tax liabilities for the young and the old can explain why the old receive large gross lump-sum transfers through social security, while the young receive little or none. A natural link also emerges between the size of the government as a provider of public goods and the magnitude of transfers that the same government will implement. (Copyright: Elsevier)

Keywords: Social security; Bargaining; Distortionary taxes (search for similar items in EconPapers)
JEL-codes: E62 H30 (search for similar items in EconPapers)
Date: 2008
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Working Paper: Political economy of taxation in an overlapping-generations economy (1999)
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