Demographics and Tax Competition in Political Economy
Tadashi Morita (),
Yasuhiro Sato and
Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)
We examine the possible impacts of demographics on the outcomes of capital tax competition in political economy. For this purpose, we develop an overlapping generations model wherein public good provision financed by capital tax is determined by majority voting. When a population is growing, younger people represent the majority, whereas when a population is decreasing, older people represent the majority. We show that the race to the bottom is likely to emerge in the economy with growing population whereas the race to the top might emerge in the economy with decreasing population.
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Working Paper: Demographics and tax competition in political economy (2016)
Working Paper: Demographics and Tax Competition in Political Economy (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:16091
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