Electoral Systems, Legislative Process and Income Taxation
نویسنده
چکیده
We examine the e ects that political institutions, i.e., electoral systems and legislative processes, have on income taxation and public goods provision. We characterize the equilibrium income tax schedules and the optimality conditions under two types of political institutions, a two-party plurality system with a single district, and one with multiple districts where tax policies are determined through a legislature. It is shown that the exogenous social welfare functions in the optimal taxation literature can be endogenously determined by explicitly modeling the political institutions, which put di erent welfare weights on di erent subsets of the population. This paper also extends the Coughlin probabilistic voting model and the Baron-Ferejohn legislative bargaining model to a function space. JEL Classi cation Code: H21, D72, D78
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