Political support and tax reforms with an application to Italy
In 2001 the Italian government introduced a personal income tax reform to be implemented in successive phases. In 2004 taxes were reduced to all income levels with higher gains for low-income and high-income individuals than for middle-income ones. A large debate arised. This paper explores the political economy reasons under this tax reform, mainly the attempt of the government to attract the uncertain voters (swing voters). A probabilistic voting model is introduced to capture the importance of swing voters. The model predicts that the average personal income tax rate tends to be lower for groups of lower income, higher preference for leisure and containing more politically mobile voters (swing voters). However, data from Italian polls show that, while the tax reform was a good strategy to attract swing voters, the specific design of the reform, which favored high-income and low-income individuals, but not the middle class, was not the more appropriate strategy. Copyright Springer Science+Business Media, LLC 2007
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 131 (2007)
Issue (Month): 1 (April)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/public+finance/journal/11127/PS2|
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.:
- Joan M. Esteban & Laurence Kranich, 2002.
"Redistributive Taxation with Endogenous Sentiments,"
UFAE and IAE Working Papers
529.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Joan Esteban & Laurence Kranich, 2003. "Redistributive Taxation with Endogenous Sentiments," Levine's Working Paper Archive 666156000000000007, David K. Levine.
- Joan Esteban & Laurence Kranich, "undated". "Redistributive Taxation With Endogenous Sentiments," Working Papers 33-02 Classification-JEL , Instituto de Estudios Fiscales.
- Matteo Cervellati & Joan-Maria Esteban & Laurence Kranich, 2005. "Redistributive Taxation with Endogenous Sentiments," Working Papers 254, Barcelona Graduate School of Economics.
- Laurence Kranich & Joan Esteban, 2002. "Redistributive Taxation with Endogenous Sentiments," Discussion Papers 02-12, University at Albany, SUNY, Department of Economics.
- Paola Profeta, 2002. "Retirement and Social Security in a Probabilistic Voting Model," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(4), pages 331-348, August.
- Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
- Alesina, Alberto Francesco & Glaeser, Edward Ludwig & Sacerdote, Burce, 2001.
"Why Doesn't the United States Have a European-Style Welfare State?,"
12502088, Harvard University Department of Economics.
- Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't the United States Have a European-Style Welfare State?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2), pages 187-278.
- Bernasconi, Michele, 2006. "Redistributive taxation in democracies: Evidence on people's satisfaction," European Journal of Political Economy, Elsevier, vol. 22(4), pages 809-837, December.
- Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough or Don't Pay at All," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 791-810.
- Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
- Thomas Piketty, 1995.
"Social Mobility and Redistributive Politics,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 110(3), pages 551-584.
- Hettich,Walter & Winer,Stanley L., 1999.
"Democratic Choice and Taxation,"
Cambridge University Press, number 9780521622912, October.
- Corneo, Giacomo & Gruner, Hans Peter, 2002.
"Individual preferences for political redistribution,"
Journal of Public Economics,
Elsevier, vol. 83(1), pages 83-107, January.
- Corneo, Giacomo & Grüner, Hans Peter, 2001. "Individual Preferences for Political Redistribution," CEPR Discussion Papers 2694, C.E.P.R. Discussion Papers.
- Luigi, Bernardi, 2002. "Tax systems and tax reforms in Europe: Italy," MPRA Paper 18045, University Library of Munich, Germany.
- Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-364, May.
- Coughlin, Peter & Nitzan, Shmuel, 1981. "Directional and local electoral equilibria with probabilistic voting," Journal of Economic Theory, Elsevier, vol. 24(2), pages 226-239, April.
- Coughlin, Peter & Nitzan, Shmuel, 1981. "Electoral outcomes with probabilistic voting and Nash social welfare maxima," Journal of Public Economics, Elsevier, vol. 15(1), pages 113-121, February.
- 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.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:131:y:2007:i:1:p:141-155. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.