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Income inequality and voters’ support for government intervention. A simple political model

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  • Angel Solano-Garcia

    (Department of Economic Theory and Economic History, University of Granada.)

Abstract

This paper studies the effect of voters’ support for government intervention on the choice of policies that reduce income inequality. Using a Downsian two-party political competition framework in which voters differ in both income and ideology, I find that an increase in income inequality does not necessarily imply an increase in the tax rate chosen by majority voting. I only obtain this result, supported by the traditional models on redistributive politics (Romer, 1975, Roberts, 1977 and Meltzer and Richard, 1983), if the support for government intervention is alike for conservative and liberal voters. However if conservatives’ support for public spending is reduced, high-income inequality is compatible with a moderate tax rate.

Suggested Citation

  • Angel Solano-Garcia, 2022. "Income inequality and voters’ support for government intervention. A simple political model," ThE Papers 22/04, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:22/04
    as

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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers22_04.pdf
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    References listed on IDEAS

    as
    1. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    2. Lydia Assouad & Amory Gethin & Thomas Piketty & Juliet-Nil Uraz, 2021. "Political Cleavages and Social Inequalities in Algeria, Iraq, and Turkey, 1990-2019," Working Papers halshs-03215898, HAL.
    3. Allan Meltzer & Scott Richard, 1983. "Tests of a rational theory of the size of government," Public Choice, Springer, vol. 41(3), pages 403-418, January.
    4. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    liberal; conservative; government intervention; Inequality.;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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