Political economy of taxation in an overlapping-generations economy

Marco Bassetto

No 133, Discussion Paper / Institute for Empirical Macroeconomics from Federal Reserve Bank of Minneapolis

Abstract: This paper builds a simple but complete model of a political system to analyze the effects of intergenerational conflicts on capital and labor income tax rates, transfers, and government spending. I show how 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. I also show that there is a natural link between the size of the government as a provider of public goods and the magnitude of transfers that the same government will implement.

Keywords: Taxation (search for similar items in EconPapers)
Date: 1999
New Economics Papers: this item is included in nep-cdm, nep-dge, nep-pbe, nep-pol and nep-pub
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Citations: View citations in EconPapers (22)

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Journal Article: Political Economy of Taxation in an Overlapping-Generations Economy (2008)
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