Redistribution, taxes, and the median voter

Marco Bassetto; Jess Benhabib

doi:10.1016/j.red.2006.02.001

Redistribution, taxes, and the median voter

Marco Bassetto, Jess Benhabib

Research output: Contribution to journal › Article › peer-review

Abstract

We study a simple model of production, accumulation, and redistribution, where agents are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted upon. Though the policy is infinite-dimensional, we prove that a median voter theorem holds if households have identical, Gorman aggregable preferences; furthermore, the tax policy preferred by the median voter has the "bang-bang" property.

Original language	English (US)
Pages (from-to)	211-223
Number of pages	13
Journal	Review of Economic Dynamics
Volume	9
Issue number	2
DOIs	https://doi.org/10.1016/j.red.2006.02.001
State	Published - Apr 2006

Keywords

Capital income taxes
Gorman aggregation
Median voter
Redistribution

ASJC Scopus subject areas

Economics and Econometrics

Access to Document

10.1016/j.red.2006.02.001

Cite this

@article{53935aa81cd04eefbf1d6d8adb61d726,

title = "Redistribution, taxes, and the median voter",

abstract = "We study a simple model of production, accumulation, and redistribution, where agents are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted upon. Though the policy is infinite-dimensional, we prove that a median voter theorem holds if households have identical, Gorman aggregable preferences; furthermore, the tax policy preferred by the median voter has the {"}bang-bang{"} property.",

keywords = "Capital income taxes, Gorman aggregation, Median voter, Redistribution",

author = "Marco Bassetto and Jess Benhabib",

note = "Funding Information: We thank Michele Boldrin, Adam Przeworski, and an anonymous referee for comments, and Onur Ozgur for technical assistance. Marco Bassetto thanks the NSF and the Sloan Foundation for financial support. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Chicago, the Federal Reserve System, or NSF.",

year = "2006",

month = apr,

doi = "10.1016/j.red.2006.02.001",

language = "English (US)",

volume = "9",

pages = "211--223",

journal = "Review of Economic Dynamics",

issn = "1094-2025",

publisher = "Academic Press Inc.",

number = "2",

}

TY - JOUR

T1 - Redistribution, taxes, and the median voter

AU - Bassetto, Marco

AU - Benhabib, Jess

N1 - Funding Information: We thank Michele Boldrin, Adam Przeworski, and an anonymous referee for comments, and Onur Ozgur for technical assistance. Marco Bassetto thanks the NSF and the Sloan Foundation for financial support. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Chicago, the Federal Reserve System, or NSF.

PY - 2006/4

Y1 - 2006/4

N2 - We study a simple model of production, accumulation, and redistribution, where agents are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted upon. Though the policy is infinite-dimensional, we prove that a median voter theorem holds if households have identical, Gorman aggregable preferences; furthermore, the tax policy preferred by the median voter has the "bang-bang" property.

AB - We study a simple model of production, accumulation, and redistribution, where agents are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted upon. Though the policy is infinite-dimensional, we prove that a median voter theorem holds if households have identical, Gorman aggregable preferences; furthermore, the tax policy preferred by the median voter has the "bang-bang" property.

KW - Capital income taxes

KW - Gorman aggregation

KW - Median voter

KW - Redistribution

UR - http://www.scopus.com/inward/record.url?scp=33645064831&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=33645064831&partnerID=8YFLogxK

U2 - 10.1016/j.red.2006.02.001

DO - 10.1016/j.red.2006.02.001

M3 - Article

AN - SCOPUS:33645064831

VL - 9

SP - 211

EP - 223

JO - Review of Economic Dynamics

JF - Review of Economic Dynamics

SN - 1094-2025

IS - 2

ER -

Redistribution, taxes, and the median voter

Abstract

Keywords

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this