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Demographics and Tax Competition in Political Economy

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

No CIRJE-F-1012, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: We examine possible impacts of demographics on 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 population growing economy whereas the race to the top might emerge in the population decreasing economy.

Pages: 27 pages
Date: 2016-05
New Economics Papers: this item is included in nep-age, nep-dge, nep-pbe and nep-pol
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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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