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Political Competition over Distortionary Taxation

Author

Listed:
  • Matias Nunez

    () (Université de Cergy-Pontoise, THEMA)

Abstract

Political parties compete over income tax functions, and voters vote and decide whether to pay full taxes or to make an e®ort to modify their tax bur- den. We show that political parties only propose e±cient income tax func- tions, in a similar manner to the probabilistic voting theory. Regarding the shape of income tax functions, it need not be the case that the majority of vot- ers prefer progressive taxation to regressive taxation as a consequence of the distortions. Nevertheless, we prove that the political appeal for progressivity is restored under mild conditions.

Suggested Citation

  • Matias Nunez, 2009. "Political Competition over Distortionary Taxation," THEMA Working Papers 2009-09, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  • Handle: RePEc:ema:worpap:2009-09
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    File URL: http://thema.u-cergy.fr/IMG/documents/2009-09.pdf
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    More about this item

    Keywords

    Income taxation; Distortions; Efficiency; Progressivity; Political competition;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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