IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Interest group demand for taxation

Listed author(s):
  • William Hunter
  • Michael Nelson

Researchers have typically ignored the determinants of the tax structure of the public sector. Political scientists have concentrated their analyses on the expenditure side of the public ledgers while economists have avoided the issue by assuming that taxes are exogenously determined. In this paper we have shown that a behavioral model of political interest groups can be employed to gain insights into the political selection of taxes. The theory provides a general complement to the well-documented analysis of special interest demand for public expenditures. Our analysis raises several important policy questions. First, is the influence of interest groups on the determination of tax systems desirable from a public policy perspective? For example, special interest groups dominated by high and middle income individuals may prefer regressive tax systems which reduce their own tax burden. Certainly the impact of interest groups on the well-known regressivity of state and local tax systems is an area worthy of additional investigation. Second, does the influence of interest groups lead to tax systems that unduly hamper economic efficiency and retard economic growth? For example, governments with economies dominated by a single industry may forsake diversity and economic development by selecting a tax system favorable to the major industry. Interest group demand for taxes may be a factor in explaining long run regional cycles such as the rise and fall of heavy manufacturing states such as the upper midwest. This research has established that a link exists between special interest group demand for taxation and the structure of local tax systems. However, the extent to which these groups influence tax systems and the exact nature of this influence requires further research. Additional research may also provide insights into the control (e.g., constitutional or legislative) of interest group influence on taxes should it be determined that such control is necessary. Copyright Kluwer Academic Publishers 1989

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer in its journal Public Choice.

Volume (Year): 62 (1989)
Issue (Month): 1 (July)
Pages: 41-61

in new window

Handle: RePEc:kap:pubcho:v:62:y:1989:i:1:p:41-61
DOI: 10.1007/BF00168013
Contact details of provider: Web page:

Order Information: Web:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Hettich, Walter & Winer, Stanley, 1984. "A positive model of tax structure," Journal of Public Economics, Elsevier, vol. 24(1), pages 67-87, June.
  2. David Sjoquist, 1981. "A median voter analysis of variations in the use of property taxes among local governments," Public Choice, Springer, vol. 36(2), pages 273-285, January.
  3. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
  4. John Mikesell, 1978. "Election periods and state tax policy cycles," Public Choice, Springer, vol. 33(3), pages 99-106, January.
  5. Ronald G. Bodkin, 1974. "Additively Consistent Relationships for Personal Savings and the Categories of Consumption Expenditures, U.S.A., 1949-1963," Eastern Economic Journal, Eastern Economic Association, vol. 1(1), pages 20-51, January.
  6. Litvack, James M & Oates, Wallace E, 1970. "Group Size and the Output of Public Goods: Theory and Application to State-Local Finance in the United States," Public Finance = Finances publiques, , vol. 25(1), pages 42-62.
  7. repec:cup:apsrev:v:79:y:1985:i:01:p:79-96_22 is not listed on IDEAS
  8. repec:cup:apsrev:v:80:y:1986:i:01:p:89-106_18 is not listed on IDEAS
  9. repec:cup:apsrev:v:81:y:1987:i:03:p:757-774_20 is not listed on IDEAS
  10. Albert Breton, 1974. "The economic theory of representative government: A reply," Public Choice, Springer, vol. 20(1), pages 129-133, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:62:y:1989:i:1:p:41-61. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.