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Capital taxation and electoral accountability

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  • Aidt, Toke S.
  • Magris, Francesco

Abstract

In a representative democracy, voters can use elections to protect their property by holding politicians accountable for the tax policies they implement while in office. This paper demonstrates that performance voting can - partly or wholly - solve the capital levy problem. We characterise the ‘best’ non-expropriating tax policies that can be sustained in a stationary Markov Perfect Equilibrium; show when this coincides with the second best tax policy; and discuss, in detail, the robustness of the result.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 22 (2006)
Issue (Month): 2 (June)
Pages: 277-291

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Handle: RePEc:eee:poleco:v:22:y:2006:i:2:p:277-291

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Web page: http://www.elsevier.com/locate/inca/505544

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Citations

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Cited by:
  1. Aidt, T.S. & Dutta, J., 2008. "Electoral Uncertainty and Public Goods," Cambridge Working Papers in Economics 0843, Faculty of Economics, University of Cambridge.
  2. Aidt, T.S. & Dutta, J., 2004. "Strategic Consensus," Cambridge Working Papers in Economics 0403, Faculty of Economics, University of Cambridge.
  3. Dalibor Eterovic, 2009. "Institutional Bias Towards The Status Quo," Working Papers Central Bank of Chile 543, Central Bank of Chile.
  4. Aidt, Toke S. & Magris, Francesco, 2006. "Capital taxation and electoral accountability," European Journal of Political Economy, Elsevier, vol. 22(2), pages 277-291, June.
  5. Toke S. Aidt & Jayasri Dutta, 2010. "Fiscal federalism and electoral accountability," Working Papers 2010/11, Institut d'Economia de Barcelona (IEB).
  6. Dalibor Eterovic, 2009. "Policy Reform Under Electoral Uncertainty," Working Papers Central Bank of Chile 546, Central Bank of Chile.
  7. Aidt, Toke S. & Dutta, Jayasri, 2007. "Policy myopia and economic growth," European Journal of Political Economy, Elsevier, vol. 23(3), pages 734-753, September.
  8. Toke A. Aidt & Facundo Albornoz, 2007. "An Economic Theory of Political Institutions: Foreign Intervention and Overseas Investments," Discussion Papers 07-03, Department of Economics, University of Birmingham.
  9. Eric Borgne & Ben Lockwood, 2006. "Do Elections Always Motivate Incumbents? Learning vs. Re-Election Concerns," Public Choice, Springer, vol. 129(1), pages 41-60, October.

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