Voting over Selfishly Optimal Nonlinear Income Tax Schedules with a Minimum-Utility Constraint

Craig Brett and John Weymark

No 16-00005, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: Pairwise majority voting over alternative nonlinear income tax schedules is considered when there is a continuum of individuals who differ in their labor productivities, which is private information, but share the same quasilinear-in-consumption preferences for labor and consumption. Voting is restricted to those schedules that are selfishly optimal for some individual. The analysis extends that of Brett and Weymark (Games and Economic Behavior, forthcoming) by adding a minimum-utility constraint to their incentive-compatibility and government budget constraints. It also extends the analysis of Röell (unpublished manuscript, 2012) and Bohn and Stuart (unpublished manuscript, 2013) by providing a complete characterization of the selfishly optimal tax schedules. It is shown that individuals have single-peaked preferences over the set of selfishly optimal tax schedules, and so the schedule proposed by the median skill type is a Condorcet winner.

Keywords: Mirrlees tax problem; nonlinear income taxation; political economy of taxation; redistributive taxation; voting over tax schedules (search for similar items in EconPapers)
JEL-codes: D7 H2 (search for similar items in EconPapers)
Date: 2016-02-12
New Economics Papers: this item is included in nep-pol and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Journal Article: Voting over selfishly optimal nonlinear income tax schedules with a minimum-utility constraint (2016)
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