Voting for immiserizing income redistribution in the Meltzer-Richard model
AbstractIn the classic Meltzer and Richard (1981) model, the canonical model of income redistribution in democracies, voters, heterogeneous on the sole dimension of idiosyncratic productivity,evaluate an income redistributive program that pays everyone a lump-sum income subsidy financed by a distorting income tax levied on all. The political-equilibrium policy under majority rule is the tax rate most preferred (in a utility sense) by the median voter. The larger the gap between the median and mean income, the larger is the scale of income redistribution favored by the median voter. But does the median voter actually end up with more income post redistribution? We establish, somewhat ironically, that the median voter (and many poorer voters)in the Meltzer-Richard model may support income redistribution that leaves them poorer in income terms. Indeed, the basis for their support may not be more income but more leisure. The analysis spotlights the fact that transfer income, unlike labor income, requires no direct sacrifice of leisure.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by LeBow College of Business, Drexel University in its series School of Economics Working Paper Series with number 2012-15.
Length: 27 pages
Date of creation: 01 Nov 2012
Date of revision:
Meltzer-Richard model; income redistribution; voting equilibrium;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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.:
- Alberto Alesina & George-Marios Angeletos, 2004.
"Fairness and Redistribution,"
NajEcon Working Paper Reviews
- Angeletos, George-Marios & Alesina, Alberto, 2005. "Fairness and Redistribution," Scholarly Articles 4553009, Harvard University Department of Economics.
- Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," Levine's Bibliography 122247000000000283, UCLA Department of Economics.
- Konrad, Kai A. & Morath, Florian, 2010.
"Social mobility and redistributive taxation,"
CEPR Discussion Papers
7997, C.E.P.R. Discussion Papers.
- Konrad, Kai A. & Morath, Florian, 2010. "Social mobility and redistributive taxation," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-15, Social Science Research Center Berlin (WZB).
- Kai A. Konrad & Florian Morath, 2011. "Social Mobility and Redistributive Taxation," Working Papers social_mobility_and_redis, Max Planck Institute for Tax Law and Public Finance.
- Marina Azzimonti & Eva de Francisco & Per Krusell, 2006. "Median-voter Equilibria in the Neoclassical Growth Model under Aggregation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 587-606, December.
- Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
- Marina Azzimonti & Eva de Francisco & Per Krusell, 2008. "Aggregation and Aggregation," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 381-394, 04-05.
- Borge, Lars-Erik & Rattso, J.Jorn, 2004. "Income distribution and tax structure: Empirical test of the Meltzer-Richard hypothesis," European Economic Review, 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
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, vol. 96(1), pages 1-9.
- Jose-Victor Rios-Rull & Per Krusell, 1999.
"On the Size of U.S. Government: Political Economy in the Neoclassical Growth Model,"
American Economic Review,
American Economic Association, vol. 89(5), pages 1156-1181, December.
- Per Krusell & Jose-Victor Rios-Rull, 1997. "On the size of U.S. government: political economy in the neoclassical growth model," Staff Report 234, Federal Reserve Bank of Minneapolis.
- Hodler, Roland, 2008. "Leisure and redistribution," European Journal of Political Economy, Elsevier, vol. 24(2), pages 354-363, June.
- Erik Lindqvist & Robert Östling, 2013.
"Identity and redistribution,"
Springer, vol. 155(3), pages 469-491, June.
- Torsten Persson & Guido Tabellini, 2002. "Political Economics: Explaining Economic Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661314, January.
- Lindqvist, Erik, 2008.
"Identity and Redistribution,"
Working Paper Series
735, Research Institute of Industrial Economics.
- Konrad, Kai A. & Morath, Florian, 2011.
"Aspirations of the middle class: Voting on redistribution and status concerns,"
Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism"
SP II 2011-102, Social Science Research Center Berlin (WZB).
- Kai A. Konrad & Florian Morath, 2011. "Aspirations of the middle class: voting on redistribution and status concerns," Working Papers aspirations_of_the_middle, Max Planck Institute for Tax Law and Public Finance.
- Allan Meltzer & Scott Richard, 1983. "Tests of a rational theory of the size of government," Public Choice, Springer, vol. 41(3), pages 403-418, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard C. Barnett).
If references are entirely missing, you can add them using this form.