EconPapers    
Economics at your fingertips  
 

Fiscal illusion and progressive taxation with retrospective voting

Antonio Abatemarco and Roberto Dell’Anno
Authors registered in the RePEc Author Service: Roberto Dell'Anno

Economic and Political Studies, 2020, vol. 8, issue 2, 246-273

Abstract: This article addresses the tax progressivity decision of a rent-maximising government under the circumstances that voters’ perceptions of the tax price of public goods are biased by cognitive anomalies (i.e. fiscal illusion) and that the electorate opts for re-appointing or for dismissing the incumbent according to a retrospective voting logic. Given electoral and constitutional constraints, we show that the design of the tax system can be sensibly affected by fiscal illusion within the population of voters. Specifically, we find that (i) the tax system is more (less) progressive when taxes and public expenditures are perceived less (more), and (ii) an increase in the median voter’s income may positively or negatively affect tax progressivity depending on the nature (pessimistic or optimistic) of fiscal illusion. The impact of fiscal illusion on tax progressivity has been validated by econometric analysis.

Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/20954816.2020.1728831 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Fiscal Illusion and Progressive Taxation with Retrospective Voting (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:repsxx:v:8:y:2020:i:2:p:246-273

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/reps20

DOI: 10.1080/20954816.2020.1728831

Access Statistics for this article

Economic and Political Studies is currently edited by Qing He and Cunna Li

More articles in Economic and Political Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2024-07-04
Handle: RePEc:taf:repsxx:v:8:y:2020:i:2:p:246-273