Voting for income-immiserizing redistribution in the Meltzer-Richard model
AbstractThis paper argues that income received via redistributive transfers, unlike labor income, requires no direct sacrifice of leisure; this makes it attractive to many voters even if it leaves them poorer. This point is made within the classic Meltzer and Richard (1981) model wherein heterogeneous voters evaluate an income-redistribution program that finances a lump-sum transfer to all via a distorting income tax. The political-equilibrium policy under majority rule is the tax most preferred, utility-wise, by the median voter. She, and many poorer voters, may support income redistribution that, ironically, leaves them poorer in income terms but with higher utility.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 36600.
Date of creation: 29 Sep 2013
Date of revision:
Publication status: Forthcoming in Economic Inquiry
Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
More information through EDIRC
income redistribution; voting; Meltzer-Richard;
Other versions of this item:
- Richard C. Barnett & Joydeep Bhattacharya & Helle Bunzel, 2014. "Voting For Income-Immiserizing Redistribution In The Meltzer–Richard Model," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 682-695, 04.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-05 (All new papers)
- NEP-CDM-2013-10-05 (Collective Decision-Making)
- NEP-MAC-2013-10-05 (Macroeconomics)
- NEP-PBE-2013-10-05 (Public Economics)
- NEP-POL-2013-10-05 (Positive Political Economics)
- NEP-UPT-2013-10-05 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Allan Meltzer & Scott Richard, 1983. "Tests of a rational theory of the size of government," Public Choice, Springer, Springer, vol. 41(3), pages 403-418, January.
- Borge, Lars-Erik & Rattso, J.Jorn, 2004. "Income distribution and tax structure: Empirical test of the Meltzer-Richard hypothesis," European Economic Review, Elsevier, Elsevier, vol. 48(4), pages 805-826, August.
- Christian Traxler, 2009.
"Majority Voting and the Welfare Implications of Tax Avoidance,"
Working Paper Series of the Max Planck Institute for Research on Collective Goods, Max Planck Institute for Research on Collective Goods
2009_22, Max Planck Institute for Research on Collective Goods.
- Traxler, Christian, 2012. "Majority voting and the welfare implications of tax avoidance," Journal of Public Economics, Elsevier, Elsevier, vol. 96(1), pages 1-9.
- Torsten Persson & Guido Tabellini, 2002. "Political Economics: Explaining Economic Policy," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262661314, December.
- Marina Azzimonti & Eva de Francisco & Per Krusell, 2008. "Aggregation and Aggregation," Journal of the European Economic Association, MIT Press, MIT Press, vol. 6(2-3), pages 381-394, 04-05.
- Hodler, Roland, 2008. "Leisure and redistribution," European Journal of Political Economy, Elsevier, vol. 24(2), pages 354-363, June.
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