Taxation and Property Rights

University of Warwick Economics Working Paper No. 683

57 Pages Posted: 31 Oct 2010

See all articles by Kimberley A. Scharf

Kimberley A. Scharf

University of Warwick - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)

Carlo Perroni

University of Warwick - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 1, 2007

Abstract

Taxation is only sustainable if the general public complies with it. The theoretical public finance literature has interpreted tax constitutions as binding contracts by which the power to tax is irretrievably conferred by individuals to government, which can then levy any tax it chooses. However, in the absence of an outside party enforcing contracts between members of a group, no arrangement within groups can be considered a binding contract, and therefore the power to tax must be sanctioned by individuals on an ongoing basis. In this paper we show how the sustainability of taxation is linked with property rights and their enforcement. (This is a revision of 'Viable Tax Constitutions,' Warwick Economics Research Paper No. 683, 2003)

Keywords: Property Rights, Taxation, Collective Provision, Coercion, Self-Enforcing Mechanism, Institutions, Political Mechanisms

JEL Classification: H1 H2, H3, H4

Suggested Citation

Scharf, Kimberley and Perroni, Carlo, Taxation and Property Rights (February 1, 2007). University of Warwick Economics Working Paper No. 683. Available at SSRN: https://ssrn.com/abstract=1700429 or http://dx.doi.org/10.2139/ssrn.1700429

Kimberley Scharf (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
44 24 76523 742 (Phone)
44 24 76523 032 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Carlo Perroni

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
44 24 7652 8416 (Phone)
44 24 7652 3032 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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