Tax Morale with Partisan Parties

  1. Solano García, Angel
Revista:
Hacienda Pública Española / Review of Public Economics

ISSN: 0210-1173

Año de publicación: 2015

Número: 213

Páginas: 83-108

Tipo: Artículo

DOI: 10.7866/HPE-RPE.15.2.4 DIALNET GOOGLE SCHOLAR

Otras publicaciones en: Hacienda Pública Española / Review of Public Economics

Resumen

This paper analyzes the political economy of income redistribution when voters are concerned about tax compliance We consider a two stage-model where there is a two party competition over the tax rate in the first stage and voters decide about their level of tax compliance in the second stage We model political competition a la Wittman with the ideology of parties endogenously determined at equilibrium We calibrate the model for an average of EU-27 countries Numerical simulations provide the tax rates proposed by the two parties and the level of tax compliance We find that a decrease in the perceived average level of tax compliance, increase the probability that the party offering the lowest income tax will win Moreover, the same result is obtained when parties� uncertainty about the preferences of the median voter increases.

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