A Contribution to the Positive Theory of Indirect Taxation
In this paper I analyse a probabilistic voting model where self-interested governments set their taxation policies in order to maximise the probabil- ity of winning elections. Society is divided into groups which have di¤erent preferences for the consumption of goods. Results show how candidates are captured by the most powerful groups, which not necessarily repre- sent the median voter but may be located at more extreme positions. The introduction of a probabilistic voting model characterized by the presence of single-minded groups overrules the classic results achieved by the me- dian voter theorem, because it is no longer the position on the income scale to drive the equilibrium policy but the ability of groups to focus on their most preferred goods, instead. This ability allows them to achieve a strong political power which candidates cannot help going along with, because they would lose elections otherwise.
|Date of creation:||05 Dec 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
- Auerbach, Alan J., 1985.
"The theory of excess burden and optimal taxation,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 1, chapter 2, pages 61-127
- Guy Laroque, 2004.
"Indirect Taxation is Superfluous under Separability and Taste Homogeneity : A Simple Proof,"
2004-23, Centre de Recherche en Economie et Statistique.
- Laroque, Guy R., 2005. "Indirect taxation is superfluous under separability and taste homogeneity: a simple proof," Economics Letters, Elsevier, vol. 87(1), pages 141-144, April.
- Peter H. Lindert, .
"Three Centuries Of Inequality In Britain And America,"
Department of Economics
97-09, California Davis - Department of Economics.
- Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216 Elsevier.
- Diamond, P. A., 1975.
"A many-person Ramsey tax rule,"
Journal of Public Economics,
Elsevier, vol. 4(4), pages 335-342, November.
- Frank Cowell, 1998.
"Measurement of inequality,"
LSE Research Online Documents on Economics
2084, London School of Economics and Political Science, LSE Library.
- Michael Keen, 2007.
IMF Working Papers
07/142, International Monetary Fund.
- Casey B. Mulligan & Xavier Sala-i-Martin, 2003.
"Social Security, Retirement, and the Single-Mindedness of the Electorate,"
NBER Working Papers
9691, National Bureau of Economic Research, Inc.
- Casey B. Mulligan & Xavier Sala-i-Martín, 2003. "Social security, retirement, and the single-mindedness of the electorate," Economics Working Papers 686, Department of Economics and Business, Universitat Pompeu Fabra.
- Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
- Michele Polo, . "Electoral competition and political rents," Working Papers 144, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Kaplow, Louis, 2006.
"On the undesirability of commodity taxation even when income taxation is not optimal,"
Journal of Public Economics,
Elsevier, vol. 90(6-7), pages 1235-1250, August.
- Louis Kaplow, 2004. "On the Undesirability of Commodity Taxation Even When Income Taxation is Not Optimal," NBER Working Papers 10407, National Bureau of Economic Research, Inc.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
- Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
- Saez, Emmanuel, 2002.
"The desirability of commodity taxation under non-linear income taxation and heterogeneous tastes,"
Journal of Public Economics,
Elsevier, vol. 83(2), pages 217-230, February.
- Emmanuel Saez, 2000. "The Desirability of Commodity Taxation under Non-Linear Income Taxation and Heterogeneous Tastes," NBER Working Papers 8029, National Bureau of Economic Research, Inc.
- Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
- Gahvari, Firouz, 2006. "On the marginal cost of public funds and the optimal provision of public goods," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1251-1262, August.
- Hettich,Walter & Winer,Stanley L., 1999.
"Democratic Choice and Taxation,"
Cambridge University Press, number 9780521622912.
- Klaus Beckmann & Elisabeth Lackner-Frey, 2002. "How Leviathan Taxes," Constitutional Political Economy, Springer, vol. 13(3), pages 265-273, September.
- Lindbeck, Assar & Weibull, Jorgen W., 1993. "A model of political equilibrium in a representative democracy," Journal of Public Economics, Elsevier, vol. 51(2), pages 195-209, June.
- canegrati, emanuele, 2006. "The Single-Mindedness Theory: Micro-foundation and Applications to Social Security Systems," MPRA Paper 1223, University Library of Munich, Germany.
- Gerald Kramer, 1983. "Is there a demand for progressivity?," Public Choice, Springer, vol. 41(1), pages 223-228, January.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:6116. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.