We study how tax policy affects the competition for venture capital by the creative class in two regions A and B. The … capital. Each region taxes venture capital at a particular rate and the tax revenue is paid out as a transfer to the … representative creative class member. In this setting, we perform five tasks. We begin by determining the first-best tax rates in the …

We study how tax policy affects the competition for venture capital by the creative class in two regions A and B. The … capital. Each region taxes venture capital at a particular rate and the tax revenue is paid out as a transfer to the … representative creative class member. In this setting, we perform five tasks. We begin by determining the first-best tax rates in the …

when they act as independent leviathans and maximize tax revenue. Fourth, we ascertain the efficient taxes that maximize … the sum of tax revenues in the aggregate economy. Finally, we discuss the implications of our analysis for tax policy …

. Unlike previous studies, tax policy in our region is set not by the elites but instead by the creative class. In this setting …, we first present a counterintuitive result in which the creative class prefers to tax itself, and not the elites or the … workers, with the tax proceeds being redistributed also to itself via lump-sum transfers. Second, we explain why this …