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Political competition and Mirrleesian income taxation: A first pass

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  • Bierbrauer, Felix J.
  • Boyer, Pierre C.

Abstract

We study political competition in a simple Mirrleesian model of income taxation. The analysis is made tractable by exploiting the mechanism design formulation of the Mirrleesian problem. We consider basic variants of the Downsian model such as vote-share maximizing politicians, a winner-take-all system, and competition among politicians who differ in a quality dimension. We focus on the welfare implications of political competition and its implications for tax rates. In particular, we clarify the conditions under which equilibrium tax policies are Pareto-efficient and the conditions under which political failures in the sense of Besley and Coate (1998) arise.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 103 (2013)
Issue (Month): C ()
Pages: 1-14

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Handle: RePEc:eee:pubeco:v:103:y:2013:i:c:p:1-14

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Web page: http://www.elsevier.com/locate/inca/505578

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Keywords: Political competition; Redistributive politics; Non-linear income taxation;

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Cited by:
  1. Felix Bierbrauer & Pierre C. Boyer, 2013. "The Pareto-Frontier in a Simple Mirrleesian Model of Income Taxation," CESifo Working Paper Series 4399, CESifo Group Munich.
  2. Alexandre B. Cunha & Emanuel Ornelas, 2014. "Political Competition and the Limits of Political Compromise," CESifo Working Paper Series 4737, CESifo Group Munich.
  3. John Roemer, 2012. "The political economy of income taxation under asymmetric information: the two-type case," SERIEs, Spanish Economic Association, vol. 3(1), pages 181-199, March.
  4. Felix Bierbrauer & Pierre C. Boyer, 2014. "Efficiency, Welfare, and Political Competition," CESifo Working Paper Series 4814, CESifo Group Munich.

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