Feasible taxation in advanced democracies
Leonardo Baggiani () and
Enrico Colombatto ()
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Enrico Colombatto: Scuola di Management ed Economia
International Review of Economics, 2017, vol. 64, issue 3, 213-229
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.
Keywords: Fiscal strategies; Populism; Rent-seeking (search for similar items in EconPapers)
JEL-codes: H10 H11 H26 P17 (search for similar items in EconPapers)
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