Affiliation:
1. Center for Macroeconomic Research (CMR), University of Cologne (email: )
2. CREST, École Polytechnique (email: )
3. ifo Institute and LMU Munich (email: )
Abstract
We study reforms of nonlinear 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 United States. 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. (JEL D72, H21, H24)
Publisher
American Economic Association
Subject
Economics and Econometrics
Cited by
25 articles.
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