Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Electoral motives, partisan motives and dynamic optimality with many taxes
T2 - an international investigation
AU - Christopoulos, Dimitris K.
AU - Loizides, John
AU - Tsionas, Michael
PY - 2009/2
Y1 - 2009/2
N2 - In this paper, we argue that tax-smoothing results based on total tax revenues may be of limited importance if in fact governments are concerned with the inter-temporal distortionary effects of many kinds of taxes, when electoral and partisan motives also have to be taken into account. We develop an inter-temporal model that predicts that tax revenue mix should follow random walks. The model is tested with international data using both time series and panel-based unit root tests. We find that during the examined period, 1973-2003, governments are not optimizing tax components in the sense of Barro.
AB - In this paper, we argue that tax-smoothing results based on total tax revenues may be of limited importance if in fact governments are concerned with the inter-temporal distortionary effects of many kinds of taxes, when electoral and partisan motives also have to be taken into account. We develop an inter-temporal model that predicts that tax revenue mix should follow random walks. The model is tested with international data using both time series and panel-based unit root tests. We find that during the examined period, 1973-2003, governments are not optimizing tax components in the sense of Barro.
KW - Tax smoothing
KW - distortions
KW - random walk
KW - electoral and partisan motives
U2 - 10.1111/j.1467-9485.2009.00474.x
DO - 10.1111/j.1467-9485.2009.00474.x
M3 - Journal article
VL - 56
SP - 94
EP - 113
JO - Scottish Journal of Political Economy
JF - Scottish Journal of Political Economy
SN - 0036-9292
IS - 1
ER -