This paper develops a political model to analyze the stability of income tax schedules. It isassumed that agents perceive any proposed alternative tax policy as more uncertain than thestatus quo. A tax policy is stable if it is a Condorcet winner. It is well known that in a modelwithout uncertainty the existence of such a policy is very rare. We show, however, that in realcases this might not be a serious problem since small amounts of uncertainty can bring stabilityto the status quo. It is also shown that linear tax functions can only be stable in economies withvery egalitarian income distributions and high taxation levels.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number
1997-07.
References listed on IDEAS 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.:
Cited by: (explanations, 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.)