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- W2020852085 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 for compromise, the opposition makes Pareto-improving arrangements possible." @default.
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- W2020852085 date "2014-12-15" @default.
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- W2020852085 title "Political conflicts, the role of opposition parties, and the limits on taxation" @default.
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- W2020852085 doi "https://doi.org/10.1177/0951629814559722" @default.
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