Majority Choice of Tax Systems in Single- and Multi-Jurisdictional Economies / Stephen Calabrese, Dennis Epple, Richard Romano.

Format:

Book

Author/Creator:

Calabrese, Stephen.

Contributor:

National Bureau of Economic Research.

Epple, Dennis.

Romano, Richard.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21231.

NBER working paper series no. w21231

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

We examine majority choice of tax instruments in single- and multi-jurisdictional economies with heterogeneous households. In our framework majority voting equilibrium exists despite the multidimensional policy choice set. We identify five competing incentives that influence choice of tax instruments. Equilibria generally entail a mixture of tax types. With multiple jurisdictions, strong reliance on head taxation in rich communities arises to deter poorer households from immigrating. Mobility fundamentally affects the equilibrium tax system with redistribution incentives dominating choice of instruments when mobility is limited. Limiting or eliminating head taxation fundamentally alters stratification, public good provision levels, and tax systems.

Notes:

Print version record

June 2015.