Taxes, redistribution, and growth

This paper develops a simple model to study the effects of growth on economic policy, and, in particular, on redistributive taxation. I do not explain economic growth; I assume it is exogenous, and ask how changes in the growth rate (and in several other variables) affect the outcome of a political process that determines taxes and transfers. It is shown that faster-growing economies will choose more or less redistribution, depending on risk aversion. In the empirically relevant case, the model predicts lower taxes in faster-growing economies.