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Perroni, Carlo and Scharf, Kimberly A. (2003) Viable tax constitutions. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.683).

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Abstract

Taxation is only sustainable if the general public complies with it. This observation is uncontroversial with tax practitioners but has been ignored by the public finance tradition, which has interpreted tax constitutions as binding contracts by which the power to tax is irretrievably conferred by individuals to government, which can then levy any tax it chooses. However, in the absence of an outside party enforcing contracts between members of a group, no arrangement within groups can be considered to be a binding contract, and therefore the power of tax must be sanctioned by individuals on an ongoing basis. In this paper we offer, for the first time, a theoretical analysis of this fundamental compliance problem associated with taxation, obtaining predictions that in some cases point to a re-interptretation of the theoretical constructions of the public finance tradition while in others call them into question.

Item Type:

Working or Discussion Paper (Working Paper)

Subjects:

H Social Sciences > HJ Public Finance

Divisions:

Faculty of Social Sciences > Economics

Library of Congress Subject Headings (LCSH):

Taxation, Finance, Public, Economic policy, Taxpayer compliance, Public goods, Welfare economics

Series Name:

Warwick economic research papers

Publisher:

University of Warwick, Department of Economics

Place of Publication:

Coventry

Official Date:

September 2003

Dates:

Date	Event
September 2003	Published

Number:

No.683

Number of Pages:

Status:

Not Peer Reviewed

Access rights to Published version:

Open Access

Description:

Preliminary and Incomplete: First draft January 2003; this draft September 2003

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