Majority Voting: A Quantitative Investigation
Jim Dolmas () and
Eric Young ()
No 1442, Working Papers (Old Series) from Federal Reserve Bank of Cleveland
We study the tax systems that arise in a once-and-for-all majority voting equilibrium embedded within a macroeconomic model of inequality. We find that majority voting delivers (i) a small set of outcomes, (ii) zero labor income taxation, and (iii) nearly zero transfers. We find that majority voting, contrary to the literature developed in models without idiosyncratic risk, is quite powerful at restricting outcomes; however, it also delivers predictions inconsistent with observed tax systems.
Keywords: Political Economy; Essential Set; Voting; Inequality; Incomplete Markets (search for similar items in EconPapers)
JEL-codes: D52 D72 E62 (search for similar items in EconPapers)
Pages: 56 pages
New Economics Papers: this item is included in nep-cdm, nep-dge, nep-mac and nep-pol
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