The political economy of endogenous taxation and redistribution
This paper examines a simple dynamic model in which agents vote over capital income taxation and redistributive transfers. We show that in equilibrium the typical agent's preferences over the tax rate are single-peaked and derive a closed-form solution for the majority-rule tax rate. We also show that high levels of initial wealth inequality can place the economy on the 'wrong side of the Laffer curve'.
(This abstract was borrowed from another version of this item.)
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.:
- Huffman, Gregory W., 1996.
"Endogenous tax determination and the distribution of wealth,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 45(1), pages 207-242, December.
- Huffman, Gregory W., 1996. "Endogenous tax determination and the distribution of wealth," Working Papers 9605, Federal Reserve Bank of Dallas.
- Krusell, Per & Quadrini, Vincenzo & Rios-Rull, Jose-Victor, 1997. "Politico-economic equilibrium and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 243-272, January. Full references (including those not matched with items on IDEAS)