What is Missed if We Leave Out Collective Choice in the Analysis of Taxation
Stanley L. Winer
Carleton University - School of Public Policy and Administration; Carleton University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); International Centre for Economic Research (ICER)
California State University, Fullerton - Department of Economics
National Tax Journal, Vol. 51, No. 2, June 1998
Omission of collective choice prevents the analyst from understanding the central role of political equilibrium. To create a framework that places tax policies in a broader equilibrium context, we must model the underlying collective allocation mechanism and use it as a starting point, whether we do empirical work explaining observed features of tax systems, or whether we engage in research on tax efficiency. A broader perspective of this nature also forces us to re-examine well-known concepts, such as tax expenditures, flat taxation and the marginal efficiency cost of public funds, and to question and re-interpret some of the conclusions that have been reached in the literature related to these concepts.
JEL Classification: D7, H1, H2, H3Accepted Paper Series
Date posted: August 25, 1998
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