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Social mobility and redistributive taxation

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  • Konrad, Kai A.
  • Morath, Florian

Abstract

We investigate redistributive taxation in a political economy experiment and determine how different patterns of social mobility affect the choices of redistributional taxes. In the absence of social mobility, voters choose tax rates that are very well in line with the prediction derived in the standard framework by Meltzer and Richard (1981). However, past or future changes in the income hierarchy affect the choice of the tax rate in the current period. The same is true for social mobility within the period to which the tax rate choice applies and for the case where the choice of the tax rate takes place behind the veil of ignorance. Due to our design of the experiment, these strong effects of own social mobility cannot be attributed to social or other-regarding preferences.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7997.

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Date of creation: Sep 2010
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Handle: RePEc:cpr:ceprdp:7997

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Keywords: Median voter; Redistribution; Social mobility;

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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Social mobility vs equality
    by chris dillow in Stumbling and Mumbling on 2011-04-06 13:18:07
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Cited by:
  1. Barnett, Richard & Bhattacharya, Joydeep & Bunzel, Helle, 2012. "Voting for immiserizing income redistribution in the Meltzer-Richard model," School of Economics Working Paper Series 2012-15, LeBow College of Business, Drexel University.

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