Date of Award
1-5-2007
Degree Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Economics
First Advisor
Dr. Jorge L. Martinez-Vazquez - Chair
Second Advisor
Dr. Charles R. Hankla
Third Advisor
Dr. Mark W. Rider
Fourth Advisor
Dr. Yongsheng Xu
Fifth Advisor
Dr. James R. Alm
Abstract
In this dissertation we analyze the role of parties’ electoral competition in aggregating voters’ preferences over policy and its impact on tax design. The representation of voters’ interests is central for the analysis of public finance since the issue of aggregation is closely linked to the tradeoff between efficiency and redistribution, and the size and composition of public spending. Parties’ aggregation of preferences is related to the mechanism in which policy makers (parties) weigh the relative merits of competing goals of the tax system (in our analysis, redistribution versus efficiency), and reveals the welfare calculus throughout parties identify groups of individuals who might be beneficiated (hurt) by policy changes. In the first essay we analyze the influence of voters in modifying tax policy through tax initiatives. In this essay we argue that the process of aggregation of preferences between the competition for votes in a representative democracy and the majority rule are different. This, in turn, might lead to the approval of a tax rate limit (TRL) initiative. We argue that the rationale for a TRL proposal is to substitute feasible tax structures rather than to constrain the government’s power to collect taxes. In addition, we provide a model that predicts the tax structure that would arise as a result of a TRL The second essay addresses the role of voters’ partisan attitudes in the determination of fiscal policies. We argue that partisan attitudes and its distribution across the electorate influence the proportion of the expected votes that different coalitions deliver in the election. We identify conditions in which voters’ partisan attitudes affect the provision of a public good and the redistributive properties of the tax structure. The third essay extends our previous analysis of the impact of voters’ partisan attitudes on tax design by incorporating parties that are policy motivated. In this setting, the relative merits of efficiency versus redistribution in designing the tax system are determined by the process of aggregation of voters’ preferences and parties’ preferences over policy. The conflict between parties and the electorate’s preferences over tax policy depends on voters’ partisan attitudes. In particular, voters’ party affiliation soft parties’ electoral constraints, allowing parties to advance the interests of their constituents. The model predicts that redistribution (efficiency) will play a more prominent role for a party that represents a coalition of low (high) income individuals with a high (low) taste for public goods.
DOI
https://doi.org/10.57709/1061441
Recommended Citation
Ponce Rodriguez, Raul A., "Essays on the Political Economy of Taxation." Dissertation, Georgia State University, 2007.
doi: https://doi.org/10.57709/1061441