Tax shape and the electoram budget cycle: a model
Résumé
An original model is proposed to give new insights about the political budget cycle. Given income inequalities among citizens, we stress the role played by the shape of a property tax system (regressive or progressive) and by public debt on the incumbent's incentives to cut taxes and/or to raise public expenditures in order to be re-elected. Furthermore, we discuss ways of mitigating the political budget cycle.
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