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Social Mobility and Redistributive Taxation

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  • Kai A. Konrad
  • Florian Morath

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 Meitzer 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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Bibliographic Info

Paper provided by Max Planck Institute for Tax Law and Public Finance in its series Working Papers with number social_mobility_and_redistributive_taxation.

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Length: 46 pages
Date of creation: Jan 2011
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Handle: RePEc:mpi:wpaper:social_mobility_and_redistributive_taxation

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Keywords: redistribution; median voter; social mobility;

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References

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  1. Tyran, Jean-Robert & Sausgruber, Rupert, 2006. "A little fairness may induce a lot of redistribution in democracy," European Economic Review, Elsevier, vol. 50(2), pages 469-485, February.
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  1. Social mobility vs equality
    by chris dillow in Stumbling and Mumbling on 2011-04-06 13:18:07

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