This paper examines a public choice model of fiscal illusion in the demand for localgovernment goods applied to local government expenditures in Britain. Data for twofiscal years, 1991/92 and 1993/9, are used reflecting two very different local taxregimes – the Community Charge in 1991/92 and...

Public choice analysts have often argued that the level of government spending willreflect voter-taxpayer’s demand for public goods, while the fiscal illusion literature hasargued that certain features of the tax structure affect voter’s perceptions of their taxburden causing them to...