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Demographics and tax competition in political economy

Tadashi Morita (), Yasuhiro Sato and Kazuhiro Yamamoto ()
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Kazuhiro Yamamoto: Graduate School of Economics, Osaka University

No 16-13, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: We examine possible impacts of demographics on outcomes of capital tax compe- tition 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 population growing economy whereas the race to the top might emerge in the population decreasing economy.

Keywords: tax competition; majority voter; fiscal externality; political externality (search for similar items in EconPapers)
JEL-codes: H20 J11 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016-05
New Economics Papers: this item is included in nep-age, nep-cdm, nep-dge, nep-lab, nep-pbe, nep-pol and nep-ure
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http://www2.econ.osaka-u.ac.jp/library/global/dp/1613.pdf (application/pdf)

Related works:
Working Paper: Demographics and Tax Competition in Political Economy (2016) Downloads
Working Paper: Demographics and Tax Competition in Political Economy (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1613

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