Death (Machines) And Taxes
AbstractIn the defense policy literature, it is widely believed that there is a pronounced bias towards the procurement of a less than optimal number of excessively sophisticated weapons. In this paper, we consider the possibility that this perceived bias is the result of the timing and informational structure of defense procurement decisions, and the inter-relationship of this structure with overall fiscal policy. Specifically, this paper presents a model that suggests that tax smoothing considerations of the type first articulated in Barro (1979) could lead social welfare maximizing decision makers to choose a higher level of weapon quality than would be optimal if government revenue could be raised without resort to distortionary taxation.
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Bibliographic InfoPaper provided by Hebrew University of Jerusalem, Department of Agricultural Economics and Management in its series Discussion Papers with number 7136.
Date of creation: 2005
Date of revision:
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Postal: Faculty of Agriculture, Food and Environmental Quality Sciences Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100
Web page: http://departments.agri.huji.ac.il/economics/indexe.html
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Defense procurement; Weapon quality; Tax smoothing; Public Economics; H57;
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- H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
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