Patriotism and Taxation

21 Pages Posted: 11 Nov 2016

See all articles by Benny Geys

Benny Geys

BI Norwegian Business School; Vrije Universiteit Brussel (VUB) - Applied Economics Department

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Date Written: November 11, 2016

Abstract

The provision of public goods by any government generally requires a significant amount of financial resources. Yet, the inherent characteristics of public goods imply that individuals who refuse to contribute financially cannot easily be excluded from the benefits provided by public goods. This chapter explores how, and when, patriotism can increase private incentives to make contributions to the common good – and thereby mitigate the free-rider problem at the heart of public finances. We discuss this patriotism-taxation relation in times of war as well as peace, and evaluate whether patriotism might help to (partially) moderate the incentives to avoid or even evade taxes. Finally, we consider the role of two potential mechanisms – i.e., migration and identification – underlying the patriotism-taxation relation, and examine governments’ incentives to invest in instilling patriotic sentiments in the population for fiscal reasons.

Keywords: patriotism, fiscal policy, warm glow, migration, identification

JEL Classification: H26, H41

Suggested Citation

Geys, Benny and Konrad, Kai A., Patriotism and Taxation (November 11, 2016). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2016-11, Available at SSRN: https://ssrn.com/abstract=2867898 or http://dx.doi.org/10.2139/ssrn.2867898

Benny Geys

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Vrije Universiteit Brussel (VUB) - Applied Economics Department ( email )

Pleinlaan 2
1040 Etterbeek
Brussel, CA 1040
Belgium

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

90-98 Goswell Road
London, EC1V 7RR
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

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