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Death (Machines) And Taxes


  • Lipow, Jonathan
  • Plessner, Yakir


In 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.

Suggested Citation

  • Lipow, Jonathan & Plessner, Yakir, 2005. "Death (Machines) And Taxes," Discussion Papers 7136, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
  • Handle: RePEc:ags:huaedp:7136

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    Defense procurement; Weapon quality; Tax smoothing; Public Economics; H57;

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement


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