EconPapers    
Economics at your fingertips  
 

Incentives for progressive income taxation

M. Socorro Puy ()

Journal of Theoretical Politics, 2019, vol. 31, issue 1, 66-102

Abstract: This study analyzes the electoral incentives for redistributive income taxation when the incumbent strategically decides the degree of tax progressivity. Progressivity makes the median voter prefer more government spending, which induces left-wing incumbents to foster progressivity and right-wing incumbents to propose flat taxation. However, if (i) more progressivity reduces middle-income voters’ fear of left-wing policies with respect to right-wing policies, (ii) parties’ office holding incentives are high, and (iii) there is low uncertainty about the median voter, then left-wing incumbents opt for less-progressive taxation and right-wing incumbents opt for more progressive taxation. In addition, we show that voters’ risk aversion over private consumption implies that right-wing incumbents propose more progressivity in comparison with left-wing incumbents proposing less progressivity. Our theoretical prediction can explain why, for example, Democrat Kennedy contributed to decreasing progressive taxation and Republican Bush contributed to increasing progressive taxation.

Keywords: Tax policy; progressive taxation; redistribution; incumbent–challenger model (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://jtp.sagepub.com/content/31/1/66.abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:jothpo:v:31:y:2019:i:1:p:66-102

Access Statistics for this article

More articles in Journal of Theoretical Politics
Bibliographic data for series maintained by SAGE Publications ().

 
Page updated 2020-08-26
Handle: RePEc:sae:jothpo:v:31:y:2019:i:1:p:66-102