The Politics of Consumption Tax

Abstract

Politicians are averse to tax increases and have difficulty legislating them, unless they are assured of electoral safety. Tax increases are often visible and meet with opposition from various economic groups, as they directly affect the material well-being of those groups. Public opposition instigates politicians’ electoral concerns, and policy advocates have difficulty overriding their opposition. Arduous persuasion by skillful political leaders may convince individuals and groups of the need for tax increases. But even then, those constituents may not want to be the ones to bear the costs of tax increases and may disagree on how to actually distribute the costs.