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- Title
ELECTORAL MOTIVES, PARTISAN MOTIVES AND DYNAMIC OPTIMALITY WITH MANY TAXES: AN INTERNATIONAL INVESTIGATION.
- Authors
Christopoulos, Dimitris K.; Loizides, John; Tsionas, Efthymios G.
- Abstract
In this paper, we argue that tax-smoothing results based on total tax revenues may be of limited importance if in fact governments are concerned with the inter-temporal distortionary effects of many kinds of taxes, when electoral and partisan motives also have to be taken into account. We develop an inter-temporal model that predicts that tax revenue mix should follow random walks. The model is tested with international data using both time series and panel-based unit root tests. We find that during the examined period, 1973–2003, governments are not optimizing tax components in the sense of Barro.
- Subjects
UNITED Kingdom; OECD countries; ECONOMETRIC models of taxation; TAX revenue estimating; TAXATION economics; TAX laws; MATHEMATICAL models; ECONOMICS
- Publication
Scottish Journal of Political Economy, 2009, Vol 56, Issue 1, p94
- ISSN
0036-9292
- Publication type
Article
- DOI
10.1111/j.1467-9485.2009.00474.x