RENT SEEKING AND TAX REFORM

Gordon Tullock

Contemporary Economic Policy, 1988, vol. 6, issue 4, 37-47

Abstract: Tax reform can either increase or reduce the amount of rent seeking, depending essentially on what is done. If tax reform involved eliminating special treatment of special groups and using the money saved either to lower the general tax rate or to discontinue government activities that most people would be better off without, then it would reduce the amount of rent seeking. Savings may, however, be used to reduce the degree of generally beneficial government activity. This is rather apt to increase the amount of rent seeking in the long run.

Date: 1988
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