Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/91227 
Year of Publication: 
2013
Series/Report no.: 
Texto para Discussão No. 1805
Publisher: 
Instituto de Pesquisa Econômica Aplicada (IPEA), Brasília
Abstract (Translated): 
This paper examines whether fiscal illusion can help to explain the behavior of federal government expenditures in Brazil during period 1990-2011. The analyses is based on a median voter model that admits that the degree of tax visibility may affect the individual's perception of his tax burden and, thus, may influences his demand for public expenditure. We find evidence that the higher the proportion of the (more visible) income tax in the total tax revenue raised by the federal government, the lower the federal government's spending, which supports the hypothesis that there is fiscal illusion in the demand for federal government expenditure. Besides, this study also confirmed the Wagner's Law in the long run.
Subjects: 
fiscal illusion
public expenditure
Wagner's law
JEL: 
H11
H30
H50
Document Type: 
Working Paper

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