Income taxation, uncertainty and stability
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.
(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.:
- Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
- Romer, T., 1977. "Majority voting on tax parameters : Some further results," Journal of Public Economics, Elsevier, vol. 7(1), pages 127-133, February.
- Bernhardt, M. Daniel & Ingerman, Daniel E., 1985. "Candidate reputations and the `incumbency effect'," Journal of Public Economics, Elsevier, vol. 27(1), pages 47-67, June.
- Snyder, James M. & Kramer, Gerald H., 1988.
"Fairness, self-interest, and the politics of the progressive income tax,"
Journal of Public Economics,
Elsevier, vol. 36(2), pages 197-230, July.
- Kramer, Gerald H. & Snyder, James M., 1983. "Fairness, Self-Interest, and the Politics of the Progressive Income Tax," Working Papers 498, California Institute of Technology, Division of the Humanities and Social Sciences.
- Hinich, Melvin J. & Ledyard, John O. & Ordeshook, Peter C., 1972. "Nonvoting and the existence of equilibrium under majority rule," Journal of Economic Theory, Elsevier, vol. 4(2), pages 144-153, April.
- Marhuenda, Francisco & Ortuno-Ortin, Ignacio, 1995. "Popular support for progressive taxation," Economics Letters, Elsevier, vol. 48(3-4), pages 319-324, June.
- Bucovetsky, Sam, 1991. "Choosing tax rates and public expenditure levels using majority rule," Journal of Public Economics, Elsevier, vol. 46(1), pages 113-131, October.
- Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
- Musgrave, Richard A, 1987. "Short of Euphoria," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 59-71, Summer.
- Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:67:y:1998:i:2:p:285-300. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.