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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19703| Title: | Taxing deficits to restrain government spending and foster capital accumulation |
| Keywords: | E62 H63 H62 H61 ddc:330 fiscal rules deficit taxation polarization capital accumulation Finanzpolitik Haushaltsdefizit Steuerpolitik Externer Effekt Investition Theorie common pool problem |
| Issue Date: | 16-Oct-2013 |
| Description: | In a dynamic model of fiscal policy, social polarization provokes a deficit bias. Policy advisors have recently proposed that governments running a deficit should be forced to generate additional tax revenue. We show that this deficit taxation reduces the deficit bias as it internalizes the externality different lobby groups impose on others. The mechanism described here is not due to the political risk of being elected out of office because the private sector dislikes taxation. Lower government spending and the resulting reduced deficit bias augment capital accumulation. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19703 |
| Other Identifiers: | http://hdl.handle.net/10419/19703 ppn:546268781 RePEc:zbw:bubdp1:6342 |
| Appears in Collections: | EconStor |
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