Democratic Choice and Taxation: A Theoretical and Empirical Analysis

Description

The authors examine how tax policies and tax systems arise out of democratic choices. The emphasis on voting behavior sets their work apart from other research on public finance. They find that democratic institutions yield tax systems that follow predictable patterns. The analysis is applied to the United States in a general equilibrium model. Theory is also linked to fact through statistical research on national and state governments in the U.S. and Canada. In addition, the authors discuss how to evaluate the efficiency of taxation in a framework that includes voting choices and review the related literature.

'Democratic Choice and Taxation is a book for specialists in public finance, graduate students, professors and economists in government and business ... It is a learned book with extensive references, used in the text and not just cited in the bibliography, to the entire field of public finance. It is methodologically sophisticated with a self-conscious concern about how its picture of the world is to be verified or stacked up against conventional public finance.' Policy Options 'The positive analysis of taxation is a surprisingly small part of the work conducted in public finance, and this book does an excellent job reminding us of its present limits, and of pushing those frontiers back a bit. The book is very clearly written, eminently fair, and provides a nice sense of the present literature. Although the authors' approach to the politics of taxation is evident throughout, they do a fine job of presenting the strengths and weaknesses of alternative approaches. Democratic Choice and Taxation consequently, would make an excellent text book for a graduate course in public finance either as a core text in a course that carefully analyzes the politics of taxation, or as a secondary text in a more traditional public finance course.' Roger D. Congleton, Journal of Economic Literature 'This ... is an integrated presentation of fifteen years of research that makes good use of the space that a book length treatment permits. The writing is lively and sometimes provocative ... The big surprise, though, is the comparative analysis. In two ambitious chapters, the authors pose a common set of questions about tax structure to a number of different political economy models, including their own ... this method is very effective in conveying the basic logic behind the different approaches. The result is a clarity and focus that move the entire book along ... In sum, this is an overall excellent contribution to the theoretical and empirical study of tax structure and institutions. It should be of general interest to researchers in public finance, public choice, and political economy.' Canadian Journal of Economics 'The authors have contributed valuable insight to our knowledge of democratic tax politics, and I hope strongly that other scholars interested in exploring some of the interfaces of economics and politics will take inspiration from this book and pursue some of its themes ... I can strongly recommend this book to everyone who has an interest in the political economy of taxation.' Richard E. Wagner, George Mason University Zeitschrift fur Nationaleconomie 'Hettich and Winer's monograph is a synthesis and extension of work that they have been involved in and which has appeared in journals. However it is not simply a collection of papers but is an ambitious book both in terms of the issues considered and particularly, at least to this reviewer, the range of techniques used. Theory, micro and macroeconometrics, and stimulation are all used here mostly to good effect. So there is something in here for everyone.' Kevin Denny, The Economic Journal 'Democratic Choice and Taxation is an impressive achievement and an enjoyable read. It deserves the attention of everyone interested in political economics and public choice, as well as those mainly interested in tax theory.' The European Journal of Political Economy 'This book provides an excellent review and critical analysis of existing economic literature on tax systems and the political environment. Its many research suggestions are particularly appealing to researchers in public policy or public finance.' The Journal of the American Taxation Association '... the book is an extremely useful addition to the evolving literature.' Economica