Altruism and the Political Economy of Income Taxation
Laurence Kranich ()
Discussion Papers from University at Albany, SUNY, Department of Economics
In this paper, I develop a positive model in which altruistic agents vote over quadratic (progressive) income tax schedules. The agents have heterogeneous preferences and productivities, and the model incorporates the incentive effects of taxation. The main result of the paper is that, under standard assumptions, there exists a self-confirming majority rule equilibrium in which the agents' labor supply decisions are optimal given the tax policy, and the tax policy is a majority rule equilibrium given the labor supply decisions. Thus, the agents' equilibrium labor supply decisions confirm voter expectations, but such expectations may be incorrect out of equilibrium. In contrast to most of the literature on voting and taxes, the model generates majority rule voting equilibria which involve progressive taxation, the norm in all industrialized countries.
References: Add references at CitEc
Citations: Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: Altruism and the Political Economy of Income Taxation (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nya:albaec:98-05
Ordering information: This working paper can be ordered from
Department of Economics, Building 25, Room 103 University at Albany State University of New York Albany, NY 12222 U.S.A.
http://www.albany.ed ... workingp/index.shtml
Access Statistics for this paper
More papers in Discussion Papers from University at Albany, SUNY, Department of Economics Department of Economics, Building 25, Room 103 University at Albany State University of New York Albany, NY 12222 U.S.A..
Bibliographic data for series maintained by Byoung Park ().