In this paper I analyse a probabilistic voting model where political candidates choose a direct taxation policy to maximise the probability of winning elections. Society is divided into groups which have di¤erent preferences for consumption of leisure or, in other words, are di¤erently single-minded on the amount of leisure. The use of a probabilistic voting model characterized by the presence of single-minded groups breaks down the classic results obtained by using the median voter theorem, because it is no longer only the level of income which drives the equilibrium policies but also the ability of groups to focus on leisure. The robustness of these results is also demonstrated in the presence of heterogeneity in the labour income. Finally, using data from the Luxemburg Income Study, I demon- strate that the cohort-speci c inequality is signi cantly a¤ected by the structure of the taxation system and that policies chosen by politicians do not seem to be originated by the goal of equality.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
6117.
Find related papers by JEL classification: D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
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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.:
Cowell, F.A., 2000.
"Measurement of inequality,"
Handbook of Income Distribution,
in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166
Elsevier.
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