A Probabilistic Voting Model of Indirect Taxation
I analyze a probabilistic voting model where two office-motivated candidates choose an indirect taxation policy to maximize the probability of winning the election, in a society divided into a finite number of groups, whose members have different preferences for the consumption of goods. Results show how candidates must satisfy those groups whose political power is higher. In equilibrium the more powerful groups obtain lower tax rates on those goods they prefer more.
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Volume (Year): 67 (2011)
Issue (Month): 1 (March)
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