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Is there a demand for income tax progressivity?

Author

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  • HINDRIKS, Jean

Abstract

Recently Marhuenda and Ortuno-Ortin (1995) have provided a popular support for progressivity theorem that says that a marginal progressive tax always defeats a marginal regressive tax as long as individuals vote for the tax scheme minimizing their tax liabilities and the median income is less than the mean income. In this paper we provide, under similar circumstances, a popular support for regressivity theorem according to which more marginal regressivity (or less marginal progressivity) can always defeat any existing tax scheme. This move towards more regressivity (or less progressivity) is supported by the extremes of the income distribution. Combining this result with Marhuenda and Ortuno-Ortin's result implies that vote cycling is inevitable and that the demand for progressivity cannot be established in the standard Downsian framework with self-interested voters.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • HINDRIKS, Jean, 2001. "Is there a demand for income tax progressivity?," LIDAM Reprints CORE 1535, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1535
    DOI: 10.1016/S0165-1765(01)00459-1
    Note: In : Economics Letters, 73, 43-50, 2001
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    Cited by:

    1. Zsofia Barany, 2011. "Income inequality and the progressivity of taxes in a coalition formation model," SciencePo Working papers hal-00972940, HAL.
    2. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09i8hj22lpn is not listed on IDEAS
    3. Carbonell-Nicolau Oriol, 2009. "A Positive Theory of Income Taxation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-49, July.
    4. Soumyanetra Munshi, 2011. "On existence of pure strategy equilibrium with endogenous income," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 37(1), pages 1-37, June.
    5. Jean-Michel Grandmont, 2004. "Fiscally Stable Income Distributions under Majority Voting and Bargaining Sets," Working Papers 2004-18, Center for Research in Economics and Statistics.
    6. Zsofia Barany, 2011. "Income inequality and the progressivity of taxes in a coalition formation model," Sciences Po Economics Publications (main) hal-00972940, HAL.
    7. Jenny de Freitas, 2009. "A probabilistic voting model of progressive taxation with incentive effects," Hacienda Pública Española / Review of Public Economics, IEF, vol. 190(3), pages 9-26, September.
    8. Harms, Philipp & Zink, Stefan, 2003. "Eating the Rich vs. Feeding the Poor: Borrowing Constraints and the Reluctance to Redistribute," Public Choice, Springer, vol. 116(3-4), pages 351-366, September.
    9. Carbonell-Nicolau, Oriol & Ok, Efe A., 2007. "Voting over income taxation," Journal of Economic Theory, Elsevier, vol. 134(1), pages 249-286, May.
    10. De Donder, Philippe & Hindriks, Jean, 2003. "The politics of progressive income taxation with incentive effects," Journal of Public Economics, Elsevier, vol. 87(11), pages 2491-2505, October.
    11. Matias Nunez, 2007. "Tax avoidance and the political appeal of progressivity," Working Papers hal-00243060, HAL.
    12. repec:spo:wpmain:info:hdl:2441/eu4vqp9ompqllr09i8hj22lpn is not listed on IDEAS
    13. Daniel R. Carroll, 2013. "The demand for income tax progressivity in the growth model," Working Papers (Old Series) 1106, Federal Reserve Bank of Cleveland.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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