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- Title
Economic and Political Foundations of Tax Structure: Comment.
- Authors
Kiesling, Herbert J.
- Abstract
The article comments on the economic and political structure of tax analysis based on a paper written by Walter Hettich and Stanley Winer. The Hettich-Winer (HW) model features voter support of a government where support is based positively upon the services received from a pure public good and negatively by tax costs including deadweight loss. Tax costs are affected by the choice of tax base, and different tax bases may involve different behavior responses by different voters. If the HW approach is correct, politicians pay attention to tax bases to benefit interactions as they seek to win elections. Such interactions fall into at least two categories. First, there is a large variety of technical interactions between public services and tax-base activities. The second reason for considering tax-expenditure interactions involves the fact that tax-base activity depends upon perceived benefits of public goods and services. The accuracy of the HW view of the world is an empirical matter although the idea that voters take both sides of the fisc into account in considering the records of their elected representatives in tax matters seems a reasonable enough proposition. Nor is it an approach that has gone unnoticed in contemporary policy discussions.
- Subjects
ECONOMIC structure; TAXATION; TAX base; POLITICIANS; MUNICIPAL services
- Publication
American Economic Review, 1990, Vol 80, Issue 4, p931
- ISSN
0002-8282
- Publication type
Article