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Is There a Demand for Income Tax Progressivity?

Jean Hindriks ()

No 415, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: Recently Marhuenda and Ortuno-Ortin (1995) have provided a popular support for progressivity theorem that says that a marginal progressive tax always defeats a marginal regressive tax as long as individuals vote for the tax scheme minimizing their tax liabilities and the median income is less than the mean income. In this paper we provide, under similar circumstances, a popular support for regressivity theorem according to which more marginal regressivity (or less marginal progressivity) can always defeat any existing tax scheme. This move towards more regressivity (or less progressivity) is supported by the extremes of the income distribution. Combining this result with Marhuenda and Ortuno-Ortin's result implies that vote cycling is inevitable and that the demand for progressivity cannot be established in the standard Downsian framework with self-interested voters.

Keywords: Voting; Redistribution; Income tax progressivity (search for similar items in EconPapers)
JEL-codes: D72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe, nep-pol and nep-pub
Date: 2000-06
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Journal Article: Is there a demand for income tax progressivity? (2001) Downloads
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