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2018 | OriginalPaper | Buchkapitel

23. On the Definition and Nature of Fiscal Coercion

verfasst von : George Tridimas, Stanley L. Winer

Erschienen in: James M. Buchanan

Verlag: Springer International Publishing

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Abstract

We introduce ideas about how coercion in public finance can be formally defined, building on recent work in the literature. Our discussion illustrates the connection between selected aspects of this research and earlier seminal work on coercion by Wicksell, Lindahl, and Buchanan and Tullock. We also attempt to contribute modestly towards a fuller understanding of the nature of coercion in a public finance setting. We use a Lindahl solution as the counterfactual social state relative to which coercion inherent in any situation is to be judged in order to evaluate and compare the nature of coercion imposed by a social planner and in an electoral equilibrium.

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Vorheriges Kapitel Votes, Vetoes, Voice, and Exit: Constitutional Protections in the Work of James M. Buchanan and Vincent Ostrom

Nächstes Kapitel Politics as Exchange in the Byzantine Empire

This and the next section make use of some ideas from Martinez-Vazquez and Winer, eds. (2014) and WTH (2014). For exploration of the connections between the two fundamental sources of coercion and the implications of this relationship for public finance from differing points of view, see Skaperdas (2014) and Wallis (2014).

‘Non-coercive’ does not necessarily mean that same thing as ‘voluntary’. For a discussion of related issues in the definition of coercion, see Congleton (2014).

Personal communication from Dan Usher.

It may be noted that a median voter is essentially a dictator imposing coercion on everyone else.

The issues involved in determining the practicality of Coasian bargaining are well known and will not be enumerated here.

We may use the latter to calculate an economy-wide average income tax rate as follows. Funding \( G^{L} \) requires a tax revenue of \( t\sum\nolimits_{i}^{N} {Y_{i} } = G^{L} \) which implies that the notional tax rate is \( t = \bar{\alpha } + \frac{{\sigma_{Y\alpha }^{2} }}{{\bar{Y}}} \). However, this is not the actual rate levied on taxpayers in a Lindahl solution. Each individual pays a personalized tax tailored to their preferences.

Buchanan (1964, pp. 229–230): “A more general statement of the necessary condition (for a Lindahl solution—our addition) is as follows: The income elasticity of demand for the public good divided by the price elasticity of demand must be equal to, and opposed in sign to, the income elasticity of the tax-price schedule. Full neutrality is present when this condition is met throughout the range of possible incomes.”

Boadway, R. (2014). The Role of Coercion in Public Economic Theory. In Martinez-Vazquez and Winer, eds., pp. 195–200.

Breton, A. (1996). Competitive Governments: An Economic Theory of Politics and Public Finance. New York: Cambridge University Press.

Buchanan, J. M. (1964). Fiscal Institutions and Efficiency in Collective Outlay. American Economic Review, 54(3), 227–235.

Buchanan, J. M. (1968). The Demand and Supply of Public Goods. Chicago: Rand McNally.

Buchanan, J. M., & Tullock, G. (1962). The Calculus of Consent: Logical Foundations of Constitutional Democracy. Ann Arbor: University of Michigan Press. (Page reference in text is to the Ann Arbor paperback edition of 1967).

Coase, R. (1960). The Problem of Social Cost. Journal of Law and Economics, 3, 1–44.CrossRef

Congleton, R. (2014). Coercion, Taxation, and Voluntary Association. In Martinez-Vazquez and Winer, eds., pp. 91–116.

Coughlin, P. (1992). Probabilistic Voting Theory. New York: Cambridge University Press.CrossRef

Hettich, W., & Winer, S. L. (1999). Democratic Choice and Taxation: A Theoretical and Empirical Investigation. Cambridge: Cambridge University Press.

Hintermann, B., & Rutherford, T. (2017). Social Planning and Coercion Under Bounded Rationality with an Application to Environmental Policy. International Tax and Public Finance, 24, 854–878.CrossRef

Kaplow, L. (2001). Horizontal Equity: New Measures, Unclear Principles. In K. Hassett & G. Hubbard (Eds.), Inequality and Tax Policy (pp. 75–97). Washington: American Enterprise Institute.

Ledyard, J. O. (2014). Non-Coercion, Efficiency and Incentive Compatibility in Public Goods. In Marinez-Vazquez and Winer, eds., pp. 143–159.

Lindahl, E. (1919). Just Taxation: A Positive Solution. In R. A. Musgrave & A. T. Peacock. Classics in the Theory of Public Finance (pp. 168–176) London: Macmillan, 1958. An excerpt from Erik Lindahl, Die Gerechtigkeit der Besteuerung (Lund: Gleerupska Universitets-Bokhandeln 1919).

Martinez-Vazquez, J., & Winer, S. L. (Eds.). (2014). Coercion and Social Welfare in Public Finance: Economic and Political Perspectives. New York: Cambridge University Press.

Martinez-Vazquez, J., & Winer, S. L. (2014). Coercion, Welfare, and the Study of Public Finance. In Martinez-Vazquez and Winer, eds., pp. 1–26.

Mueller, D. C. (2003). Public Choice III. Cambridge: Cambridge University Press.

Munger, M. C. (2014). Kaldor-Hicks-Scitovsky Coercion, Coasian Bargaining, and the State. In Martinez-Vazquez and Winer, eds., pp. 117–135.

Sehili, S., & Martinez-Vazquez, J. (2014). Lindahl Fiscal Incidence and the Measurement of Coercion. In Martinez-Vazquez and Winer, eds., pp. 201–240.

Skaperdas, S. (2014). Proprietary Public Finance: On Its Emergence and Evolution Out of Anarchy. In Martinez-Vazquez and Winer, eds., pp. 60–81.

Wallis, J. J. (2014). The Constitution of Coercion: Wicksell, Violence, and the Ordering of Society. In Martinez-Vazquez and Winer, eds., pp. 29–59.

Wicksell, K. (1896). A New Principle of Just Taxation. In R. A. Musgrave & A. T. Peacock (Eds.), Classics in the Theory of Public Finance (pp. 73–118). London: Macmillan. An excerpt from KnutWicksell, Finanztheoretische Untersuchungen (Jena: Fischer).

Winer, S. L., Tridimas, G., & Hettich, W. (2014). Social Welfare and Coercion in Public Finance. In Martinez-Vazquez and Winer, eds., pp. 160–194.

Titel: On the Definition and Nature of Fiscal Coercion
verfasst von: George Tridimas
Stanley L. Winer
Verlag: Springer International Publishing
Buch: James M. Buchanan
Print ISBN: 978-3-030-03079-7

Electronic ISBN: 978-3-030-03080-3

Copyright-Jahr: 2018
DOI: https://doi.org/10.1007/978-3-030-03080-3_23