Optimal taxation and fiscal constitution
Article Abstract:
Research was conducted to examine the political mechanisms that ensure efficiency enhancing restraints on taxes using a model of optimal taxation where the government's inability to precommit to a tax policy leads to excessive taxation. Results reveal that a fiscal constitution may be effective as a commitment device. By institutionalizing a supermajority rule, the government commits itself to levy lower taxes, enhancing economic welfare and increasing overall output.
Publication Name: The Journal of Public Economics
Subject: Government
ISSN: 0047-2727
Year: 1999
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Capital income taxation and risk-taking in a small open economy
Article Abstract:
Analysis of taxation and private risk taking trends reveals that higher taxes makes it less likely for a family to maintain risky assets. Estimations of a reduced-form multinomial probit model of household portfolio choice using simulated moments reveals that risk plays an important role in mean and variability of growth. Moreover, risk also plays an important role in determining the conditions where a higher tax rate can be welfare improving.
Publication Name: The Journal of Public Economics
Subject: Government
ISSN: 0047-2727
Year: 1998
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