Is there a demand for income tax progressivity?
AbstractRecently Marhuenda and Ortuno-Ortin (1995) have provided a popular support for progressivity theorem that says that a marginal progressive tax always defeats a marginal regressive tax as long as individuals vote for the tax scheme minimizing their tax liabilities and the median income is less than the mean income. In this paper we provide, under similar circumstances, a popular support for regressivity theorem according to which more marginal regressivity (or less marginal progressivity) can always defeat any existing tax scheme. This move towards more regressivity (or less progressivity) is supported by the extremes of the income distribution. Combining this result with Marhuenda and Ortuno-Ortin's result implies that vote cycling is inevitable and that the demand for progressivity cannot be established in the standard Downsian framework with self-interested voters.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 73 (2001)
Issue (Month): 1 (October)
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Web page: http://www.elsevier.com/locate/ecolet
Other versions of this item:
- HINDRIKS, Jean, . "Is there a demand for income tax progressivity?," CORE Discussion Papers RP -1535, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean Hindriks, 2000. "Is There a Demand for Income Tax Progressivity?," Working Papers 415, Queen Mary, University of London, School of Economics and Finance.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
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