Why Don’t We Tax the Rich? Inequality, Legislative Malapportionment, and Personal Income Taxation around the World
Personal income taxation remains relatively low in many developing countries despite recent democratic advancement and rapid economic growth; this is hard to reconcile with standard political economy models of taxation. This paper argues that the details of political institutions help to explain these low levels of personal income taxation. In particular, legislative malapportionment enables rich elites to have disproportionate political influence. Because over-represented districts tend to be dominated by parties aligned with the elite, these groups can block legislative attempts to introduce progressive taxes. Using a sample of more than 50 countries (including 17 across Latin America) between 1990 and 2007, this paper finds that i) countries with historically more unequal distributions of wealth and income systematically present higher levels of legislative malapportionment, and ii) higher levels of malapportionment are associated with lower shares of personal income taxes in GDP.
|Date of creation:||Nov 2011|
|Contact details of provider:|| Postal: 1300 New York Avenue, NW, Washington, DC 20577|
Web page: http://www.iadb.org/res
More information through EDIRC
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.:
- Torsten Persson & Gerard Roland & Guido Tabellini, 2000.
"Comparative Politics and Public Finance,"
Journal of Political Economy,
University of Chicago Press, vol. 108(6), pages 1121-1161, December.
- Torsten Persson & Gerard Roland & Guido Tabellini, "undated". "Comparative Politics and Public Finance," Working Papers 114, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Persson, Torsten & Roland , Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," Seminar Papers 633, Stockholm University, Institute for International Economic Studies.
- Persson, T. & Roland, G. & Tabellini, G., 1997. "Comparative Politics and Public Finance," Papers 633, Stockholm - International Economic Studies.
- Persson, Torsten & Roland, Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," CEPR Discussion Papers 1737, C.E.P.R. Discussion Papers.
- Alessro Lizzeri & Nicola Persico, "undated".
"The Provision of Public Goods Under Alternative Electoral Incentives,"
Penn CARESS Working Papers
b96440ba0bfa06ca550ac40aa, Penn Economics Department.
- Nicola Persico & Alessandro Lizzeri, 2001. "The Provision of Public Goods under Alternative Electoral Incentives," American Economic Review, American Economic Association, vol. 91(1), pages 225-239, March.
- Alessandro Lizzeri & Nicola Persico, "undated". ""The Provision of Public Goods Under Alternative Electoral Incentives''," CARESS Working Papres 98-08, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Deininger, Klaus & Squire, Lyn, 1996.
"A New Data Set Measuring Income Inequality,"
World Bank Economic Review,
World Bank Group, vol. 10(3), pages 565-591, September.
- Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
- Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
- Ticchi, Davide & Vindigni, Andrea, 2003.
726, Stockholm University, Institute for International Economic Studies.
- Carlos Scartascini & Mariano Tommasi, 2009.
"The Making of Policy: Institutionalized or Not?,"
IDB Publications (Working Papers)
5379, Inter-American Development Bank.
- Samuels, David & Snyder, Richard, 2001. "The Value of a Vote: Malapportionment in Comparative Perspective," British Journal of Political Science, Cambridge University Press, vol. 31(04), pages 651-671, October.
- Dehejia, Rajeev & DeLeire, Thomas & Luttmer, Erzo F. P., 2005.
"Insuring Consumption and Happiness through Religious Organizations,"
Working Paper Series
rwp05-047, Harvard University, John F. Kennedy School of Government.
- Dehejia, Rajeev & DeLeire, Thomas & Luttmer, Erzo F.P., 2007. "Insuring consumption and happiness through religious organizations," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 259-279, February.
- Rajeev Dehejia & Thomas DeLeire & Erzo F.P. Luttmer, 2005. "Insuring Consumption and Happiness Through Religious Organizations," NBER Working Papers 11576, National Bureau of Economic Research, Inc.
- Gordon, Roger & Li, Wei, 2009.
"Tax structures in developing countries: Many puzzles and a possible explanation,"
Journal of Public Economics,
Elsevier, vol. 93(7-8), pages 855-866, August.
- Roger Gordon & Wei Li, 2005. "Tax Structure in Developing Countries: Many Puzzles and a Possible Explanation," NBER Working Papers 11267, National Bureau of Economic Research, Inc.
- Scheve, Kenneth & Stasavage, David, 2006. "Religion and Preferences for Social Insurance," Quarterly Journal of Political Science, now publishers, vol. 1(3), pages 255-286, July.
- Mario Mansour & Michael Keen, 2009. "Revenue Mobilization in Sub-Saharan Africa; Challenges from Globalization," IMF Working Papers 09/157, .
- Paola Profeta & Simona Scabrosetti, 2010. "The Political Economy of Taxation," Books, Edward Elgar Publishing, number 13258.
- Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
- Keefer, Philip & Khemani, Stuti, 2003. "Democracy, public expenditures, and the poor," Policy Research Working Paper Series 3164, The World Bank.
- Casey B. Mulligan & Ricard Gil & Xavier Sala-i-Martin, 2004.
"Do Democracies Have Different Public Policies than Nondemocracies?,"
Journal of Economic Perspectives,
American Economic Association, vol. 18(1), pages 51-74, Winter.
- Casey B. Mulligan & Xavier Sala-i-Martin & Ricard Gil, 2003. "Do Democracies Have Different Public Policies than Nondemocracies?," NBER Working Papers 10040, National Bureau of Economic Research, Inc.
- Francesco Trebbi & Philippe Aghion & Alberto Alesina, 2008.
"Electoral Rules and Minority Representation in U.S. Cities,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 123(1), pages 325-357.
- Trebbi, Francesco & Aghion, Philippe & Alesina, Alberto, 2008. "Electoral Rules and Minority Representation in U.S. Cities," Scholarly Articles 4551793, Harvard University Department of Economics.
- Paul, Gilles Saint & Verdier, Thierry, 1996. "Inequality, redistribution and growth: A challenge to the conventional political economy approach," European Economic Review, Elsevier, vol. 40(3-5), pages 719-728, April.
- Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December.
- Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
- Mauricio Cárdenas & Didem Tuzemen, 2011. "Under-investment in state capacity: the role of inequality and political instability," Research Working Paper RWP 11-07, Federal Reserve Bank of Kansas City.
- Horiuchi, Yusaku, 2004. "Malapportionment and Income Inequality: A Cross-National Analysis," British Journal of Political Science, Cambridge University Press, vol. 34(01), pages 179-183, January.
- Reinikka, Ritva & Svensson, Jakob, 2004. "The power of information : evidence from a newspaper campaign to reduce capture," Policy Research Working Paper Series 3239, The World Bank.
- Machado, Fabiana, 2011. "Inequality, Uncertainty, and Redistribution," MPRA Paper 35665, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:idb:wpaper:4724. 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: (Monica Bazan)
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.