Abstract
Tax and expenditure limitations (TELs) are a common and contentious part of the American state and local fiscal landscape. Understanding the impact of various forms of tax limits from the viewpoint of the median voter in the middle of the political spectrum is harder than understanding how the extremes of the fiscal political spectrum view TELs. This paper extends the median voter model of voting over the size of the government budget developed by Hotelling and Bowen and the agenda-setting models of Romer and Rosenthal and Flowers to examining the impact of four types of TELs in both open-agenda median voter and agenda-setting models. Some tax and expenditure limitations place an absolute cap on certain tax rates. Understanding the effects of TELs in voting models sheds light on why debates over the size of government often become debates over the fiscal institutions that set the political process that determines the government budget.