Quotation Prettner, Klaus, Rostam-Afschar, Davud. 2020. Can taxes raise output and reduce inequality? The case of lobbying. Scottish Journal of Political Economy. 67 455-461.




One of the key institutional elements for reducing inequality is the tax and transfer system. However, economists and policymakers usually view high taxes as detrimental to economic growth. We isolate one important mechanism by which higher taxes reduce inequality and raise per capita gross domestic product (GDP) at the same time. This mechanism operates in the presence of unproductive lobbying. Higher taxes induce a reallocation from lobbying toward production. This raises overall output and reduces the consumption gap between those who benefit from lobbying and those who bear its negative effects.


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Publication's profile

Status of publication Published
Affiliation External
Type of publication Journal article
Journal Scottish Journal of Political Economy
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new VW-D
Language English
Title Can taxes raise output and reduce inequality? The case of lobbying
Volume 67
Year 2020
Page from 455
Page to 461
Reviewed? Y
URL https://onlinelibrary.wiley.com/doi/full/10.1111/sjpe.12248
DOI https://doi.org/10.1111/sjpe.12248
Open Access Y
Open Access Link https://onlinelibrary.wiley.com/doi/full/10.1111/sjpe.12248


Prettner, Klaus (Details)
Rostam-Afschar, Davud (University of Mannheim, Mannheim, Germany)
Department of Economics (Crespo Cuaresma) (Details)
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