Abstract
As inequality rises taxation can be less efficient in the sense that a given tax rate produces a smaller tax base. If this tax base effect outweighs the conventional political effect, then increasing inequality can induce less public spending (or redistribution), contrarily to Alesina and Rodrik and Persson and Tabellini.
Original language | English |
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Pages (from-to) | 339-346 |
Number of pages | 8 |
Journal | Economics Letters |
Volume | 65 |
Issue number | 3 |
DOIs | |
Publication status | Published - 1999 Dec |
Externally published | Yes |
Keywords
- Inequality
- Political economy
- Political effect
- Tax base effect
ASJC Scopus subject areas
- Finance
- Economics and Econometrics