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Politically Feasible Reforms of Non-Linear Tax Systems

Felix J. Bierbrauer, Pierre Boyer and Andreas Peichl ()
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Felix J. Bierbrauer: University of Cologne

No 236, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: We study reforms of non-linear income tax systems from a political economy perspective. We present a median voter theorem for monotonic tax reforms, reforms so that the change in the tax burden is a monotonic function of income. We also provide an empirical analysis of tax reforms, with a focus on the US. We show that past reforms have, by and large, been monotonic. We also show that support by the median voter was aligned with majority support in the population. Finally, we develop sufficient statistics that enable to test whether a given tax system admits a politically feasible reform.

Keywords: non-linear income taxation; tax reforms; political economy; optimal taxation (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 H21 (search for similar items in EconPapers)
Date: 2020-04-15
New Economics Papers: this item is included in nep-pbe and nep-pol
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Related works:
Journal Article: Politically Feasible Reforms of Nonlinear Tax Systems (2021) Downloads
Working Paper: Politically feasible reforms of non-linear tax systems (2018) Downloads
Working Paper: Politically Feasible Reforms of Non-Linear Tax Systems (2017) Downloads
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