Taxation of Rent-Seeking Activities

Glazer, Amihai and Konrad, Kai A. (1997): Taxation of Rent-Seeking Activities. Papers / University of California, School of Social Sciences, 97-98-04

Abstract

We consider taxes on firms which engage in rent-seeking contests. The taxes can be on realized profits or on rent-seeking expenditures, and the firms can engage in a context where either the hoghest bidder wins the prize, or else a firm's probability of winning equals the ratio of its expenditures to expenditures by all firms. We find the deadweight loss, and cause no reduction in the profits of firms.

• Item Type: Paper
• Keywords: Taxes; Enterprises
• Faculties: Economics > Chairs > MPI for Tax Law and Public Finance
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: L10, L11
• Place of Publication: Irvine
• Language: English