A Citizen-Candidate Model of Tax Competition with Interdependent Preferences

In a citizen-candidate model of tax competition, this study describes the emergence of a policymaker (political leader) that has a hostile or altruistic stance toward neighboring countries. The results show that (i) when countries competing for mobile capital have similar positions on the import/exp...

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Bibliographic Details
Published in:Finanzarchiv 2020-12, Vol.76 (4), p.313-328
Main Authors: Kasamatsu, Satoshi, Masuda, Taku, Ogawa, Hikaru
Format: Article
Language:English
Subjects:
Altruism
Candidates
Capital markets
Citizens
Economic policy
Election results
Exports
International taxation
International trade
Political leadership
Politicians
Presidential elections
Rent-seeking
Tax rates
Taxation
Voters
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Summary:In a citizen-candidate model of tax competition, this study describes the emergence of a policymaker (political leader) that has a hostile or altruistic stance toward neighboring countries. The results show that (i) when countries competing for mobile capital have similar positions on the import/export of capital, an altruistic citizen will be elected as the political leader, and (ii) when their capital positions differ, a citizen that has malicious preferences can become the representative of the country.
ISSN:0015-2218
1614-0974
DOI:10.1628/fa-2020-0011