Optimal representative taxation, information and tax reform

This paper moves toward the formulation of a normative theory of taxation that incorporates collective choice as an essential element. Such a theory has many interesting parallels to optimal taxation, including large information requirements for political agents. The paper discusses possible solutions to the information problem in a collective choice setting. The answer appears to lie in a decentralized information gathering and policy process rather than in the development of simplified guidelines for improving the decisions of central planners. The paper proposes a framework to examine the gains and losses in expected support from decentralized policy choices affecting taxation, and uses the analysis to discuss the influence of differences in constitutional structure on the adoption of informational strategies and to review the nature of tax reform.