Political conflicts, the role of opposition parties, and the limits on taxation

Wolton, Stephane ORCID: 0000-0003-1405-650X (2015) Political conflicts, the role of opposition parties, and the limits on taxation. Journal of Theoretical Politics, 27 (4). pp. 570-587. ISSN 0951-6298

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Abstract

In democratic systems, the rich have diverse channels through which they can influence policies. In a model of taxation, I study the capacity of the rich to constrain the fiscal choice of a government by starting a costly political conflict (for example, a press campaign), which imposes a cost on the government and influences the fate of the government’s fiscal plan. I show that the government’s tax proposal depends critically on the marginal disutility of taxation for the rich. This approach provides a new rationale for the empirically documented U-shaped relationship between inequality and taxation. It also highlights a new role for opposition parties. By agreeing to bear part of the cost of a political conflict in exchange

Item Type:	Article
Official URL:	http://jtp.sagepub.com/
Additional Information:	© 2014 The Author
Divisions:	Government
Subjects:	H Social Sciences > H Social Sciences (General) J Political Science > JA Political science (General)
Date Deposited:	23 Nov 2015 09:48
Last Modified:	01 Nov 2024 04:24
URI:	http://eprints.lse.ac.uk/id/eprint/64475

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