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

Angel Solano-Garcia ()
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Angel Solano-Garcia: Department of Economic Theory and Economic History, University of Granada.
Authors registered in the RePEc Author Service: Angel Solano Garcia ()

No 22/04, ThE Papers from Department of Economic Theory and Economic History of the 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.

Keywords: liberal; conservative; government intervention; Inequality. (search for similar items in EconPapers)
JEL-codes: D72 D74 F22 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2022-02-21
New Economics Papers: this item is included in nep-cdm and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:gra:wpaper:22/04

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