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Politically Feasible Reforms of Non-Linear Tax Systems

Felix Bierbrauer and Pierre Boyer

No 6573, CESifo Working Paper Series from CESifo Group Munich

Abstract: We present a conceptual framework for the analysis of politically feasible tax reforms. First, we prove a median voter theorem for monotonic reforms of non-linear tax systems. This yields a characterization of reforms that are preferred by a majority of individuals over the status quo and hence politically feasible. Second, we show that every Pareto-efficient tax systems is such that moving towards lower tax rates for below-median incomes and towards higher rates for above median incomes is politically feasible. Third, we develop a method for diagnosing whether a given tax system admits reforms that are welfare-improving and/ or politically feasible.

Keywords: non-linear income taxation; tax reforms; political economy; welfare analysis (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 H21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-mic, nep-pbe and nep-pol
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
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Working Paper: Politically feasible reforms of non-linear tax systems (2018) Downloads
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