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| Author: | Bierbauer, F. Sahm, M. |
| Title: | Optimal democratic mechanisms for taxation and public good provision |
| Journal: | Journal of Public Economics
2010 : AUG, VOL. 94:7-8, p. 453-466 |
| Index terms: | public goods taxation asymmetric information models |
| Freeterms: | heterogeneity |
| Language: | eng |
| Abstract: | This study explores the interdependence of optimal tax and expenditure policies. Information on preferences is to be made available for an optimal policy. The problem is dealt with from a general mechanism design perspective. It is shown that efficiency is possible only if the individuals deciding on public good provision face an own incentive scheme differing from the tax system. Democratic mechanisms are studied with the property that tax payers vote over public goods. Under such a mechanism, efficiency cannot be reached and welfare from public good provision declines with the inequality btw. rich and poor individuals increasing. |
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