A model of police financing through income and consumption taxes

Published date01 July 2023
AuthorWeiguang Deng,Xue Li,Zijun Luo
Date01 July 2023
DOIhttp://doi.org/10.1111/sjpe.12337
Scott J Polit Econ . 2023;70:217–230. wileyonlinelibrary.com/journal/sjpe
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217
© 2022 Scottis h Economic Societ y.
|
Law enforcement s derive their fun ds and revenues from dif ferent sources. T he major sources are fu nds and grants
from local and f ederal governm ents. In the Uni ted States, loc al governments p rovided more th an two- thirds of
police funds whi le the federal government provi ded about 20% in 2015.1 In England and Wale s in a similar time
period, core fu nding (federal) provided abou t 70% of police funds while council ta x (local) provided most of the
rest.2 The diff erences in how the police are f unded could have major implic ations for how individuals in a n econ-
1Source: https://www.cnbc.com/2020/06/25/two- feder al- progr ams- helpe d- expan d- polic e- fundi ng- by- over- 200pe rcent.html (last retri eved on
January 20, 2021).
2Source: Poli ce Funding for Engl and & Wales 2015– 2021.
Received: 15 Jul y 2020 
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  Accepted: 10 August 2 022
DOI: 10 .1111/sjpe.1 2337



1|1|2
1School of Econo mics and Trade, Hunan
University, Yuelu District, Changsha, China
2Departm ent of Economics, Col lege of
Business Adm inistration, Th e University of
Nebraska at O maha, Omaha, Neb raska, USA

Xue Li, School of E conomics and Trade,
Hunan Univer sity, No. 109, Shijiachong
Road, Yuelu District, Changsha, China.
Email: lixue@hnu.edu.cn

National Natu ral Science Found ation of
China, Gran t/Award Number: 71874051

This article st udies police financing with a focus on t he dif-
ference in the timing between federal and local government
funds. In general , federal government f unds came from
income taxes collec ted before possible a ppropriative ac-
tivities while local government funds came from consump-
tion taxes collec ted afterward s. We find that income- tax
financing result s in more workers, mor e police, and fewer
thieves when approp riation and tax rates are the same be -
tween the two c ases. Funding the poli ce before possible
appropriative activities works as a deterrence. Our findings
show the complexit y of studying crime and police f inancing
even in a highly styli zed model.

consumption tax, income tax, police financing
 
D31; H24; J24

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