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The politics of progressive income taxation with incentive effects

  • De Donder, Philippe
  • Hindriks, Jean

This paper studies majority voting over non-linear income taxes when individuals respnd to taxation by substituting untaxable leisure to taxable labor. We first show that voting cycles over progressive and regressive taxes is inevitable. We then investigate three solution to this cycling problem: (i)rducing the policy space to the policies that are ideal for some voter; (ii) weakening the voting equilibrium concept; (iii) assuming parties also care about the size of their majority.

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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 87 (2003)
Issue (Month): 11 (October)
Pages: 2491-2505

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Handle: RePEc:eee:pubeco:v:87:y:2003:i:11:p:2491-2505
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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  1. John E. Roemer, . "The Democratic Political Economy Of Progressive Income Taxation," Department of Economics 97-11, California Davis - Department of Economics.
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  5. Young, H Peyton, 1990. "Progressive Taxation and Equal Sacrifice," American Economic Review, American Economic Association, vol. 80(1), pages 253-66, March.
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  8. 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.
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  11. Philippe De Donder & Jean Hindriks, 1998. "The political economy of targeting," Public Choice, Springer, vol. 95(1), pages 177-200, April.
  12. J-F. Laslier & A. Trannoy & K. Van Der Straeten, 2000. "Voting Under Ignorance of Job Skills of Unemployed : The Overtaxation bias," THEMA Working Papers 2000-38, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  13. David Epstein, 1997. "Uncovering some subtleties of the uncovered set: Social choice theory and distributive politics," Social Choice and Welfare, Springer, vol. 15(1), pages 81-93.
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  17. Stigler, George J, 1970. "Director's Law of Public Income Redistribution," Journal of Law and Economics, University of Chicago Press, vol. 13(1), pages 1-10, April.
  18. Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers W95/07, Institute for Fiscal Studies.
  19. Mitra, Tapan & Ok, Efe A. & Kockesen, Levent, 1998. "Popular support for progressive taxation and the relative income hypothesis," Economics Letters, Elsevier, vol. 58(1), pages 69-76, January.
  20. Philippe De Donder, 2000. "Majority voting solution concepts and redistributive taxation," Social Choice and Welfare, Springer, vol. 17(4), pages 601-627.
  21. Laffond G. & Laslier J. F. & Le Breton M., 1993. "The Bipartisan Set of a Tournament Game," Games and Economic Behavior, Elsevier, vol. 5(1), pages 182-201, January.
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