The government faces both economic and political constraints on its ability to raise revenue. Political factors can limit the government's revenue-generating ability to levels below those dictated by economic constraints. Taxation is more directly constrained by the political process than...

When political factors are taken into account, tax reform intended to be revenue neutral is likely to increase tax revenues. Any reduction in the excess burden of the tax system is likely to increase government revenues because the marginal political cost of tax increases is reduced. Evidence...