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Voting for income-immiserizing redistribution in the Meltzer-Richard model

Richard Barnett (), Joydeep Bhattacharya () and Helle Bunzel

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: This paper argues that income received via redistributive transfers, unlike labor income, requires no direct sacrifice of leisure; this makes it attractive to many voters even if it leaves them poorer. This point is made within the classic Meltzer and Richard (1981) model wherein heterogeneous voters evaluate an income-redistribution program that finances a lump-sum transfer to all via a distorting income tax. The political-equilibrium policy under majority rule is the tax most preferred, utility-wise, by the median voter. She, and many poorer voters, may support income redistribution that, ironically, leaves them poorer in income terms but with higher utility.

Keywords: income redistribution; voting; Meltzer-Richard (search for similar items in EconPapers)
JEL-codes: D72 E6 H2 (search for similar items in EconPapers)
Date: 2013-09-29
New Economics Papers: this item is included in nep-cdm, nep-mac, nep-pbe, nep-pol and nep-upt
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