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A Theory of Feasible Taxation in Advanced Democracies

Author

Listed:
  • Leonardo Baggiani
  • Enrico Colombatto

    (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

Abstract

Tax pressure is usually considered the result of the policymakers’ efforts to maximise public expenditure, possibly by resorting to populism in order to alleviate tensions among the taxpayers. This paper offers a different and more articulated approach, following which populism is exogenous in the short run, but may change in the long run; taxpayers are sensitive to the quality of public expenditure; and policymakers try to find a compromise between their desire to engage in rent-seeking and their electoral ambitions. This paper shows under which circumstances compromise is obtained, how tensions arise, and illustrates the categories of outcomes that the taxpayers’ reactions may generate.

Suggested Citation

  • Leonardo Baggiani & Enrico Colombatto, 2015. "A Theory of Feasible Taxation in Advanced Democracies," Working papers 033, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    • Handle: RePEc:tur:wpapnw:033
    as

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    File URL: http://www.bemservizi.unito.it/repec/tur/wpapnw/m33.pdf
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    References listed on IDEAS

    as
    1. Mina Baliamoune-Lutz & Pierre Garello, 2014. "Tax structure and entrepreneurship," Small Business Economics, Springer, vol. 42(1), pages 165-190, January.
    2. Svetozar Pejovich & Enrico Colombatto, 2008. "Law, Informal Rules and Economic Performance," Books, Edward Elgar Publishing, number 4198, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Part-time work; Horizontal and vertical part-time contracts; Flexible and elastic clauses; Firm total factor productivity (TFP); Semiparametric estimation methods.;
    All these keywords.

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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