Voting and Nonlinear Taxes in a Stylized Representative Democracy

Henning Bohn () and Charles Stuart

No CESifo Working Paper No. 1058, CESifo Working Paper Series from CESifo Group Munich

Abstract: We derive median-voter results and study the shape of redistributional taxes when voters elect a candidate who imposes taxes to maximize own utility. Under general conditions, a median-productivity candidate is a Condorcet winner. The imposed tax function is nonlinear, may place high marginal rates on very low incomes, and may have an interval of negative marginal rates below the income of the winning candidate. Marginal rates are positive throughout, however, if non-redistributional spending or altruism toward the poor are great enough.

JEL-codes: D70 H20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm and nep-pol
Date: 2003
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