Voting over selfishly optimal nonlinear income tax schedules with a minimum-utility constraint |
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| Institution: | 1. Department of Economics, Mount Allison University, 144 Main Street, Sackville, NB E4L 1A7, Canada;2. Department of Economics, Vanderbilt University, VU Station B #351819, 2301 Vanderbilt Place, Nashville, TN 37235-1819, USA;1. LAMETA – INRA – CNRS – SupAgro-Univ. Montpellier, 2 place Viala, 34060 Montpellier, France;2. IESEG School of Management – LEM – CNRS, 3 rue de la Digue, 59000 Lille, France;3. CIRED–CNRS–EHESS–Ecole des Ponts ParisTech, 45 bis avenue de la Belle-Gabrielle, 94736 Nogent Sur Marne Cedex, France;1. Dipartimento di Scienze Economiche e Statistiche, University of Naples Federico II, Italy;2. Dipartimento di Studi Aziendali e Quantitativi, University of Naples Parthenope, Italy |
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| Abstract: | Pairwise majority voting over alternative nonlinear income tax schedules is considered when there is a continuum of individuals who differ in their labor productivities, which is private information, but share the same quasilinear-in-consumption preferences for labor and consumption. Voting is restricted to those schedules that are selfishly optimal for some individual. The analysis extends that of Brett and Weymark (2016) by adding a minimum-utility constraint to their incentive-compatibility and government budget constraints. It also extends the analysis of Röell (2012) and Bohn and Stuart (2013) by providing a complete characterization of the selfishly optimal tax schedules. It is shown that individuals have single-peaked preferences over the set of selfishly optimal tax schedules, and so the schedule proposed by the median skill type is a Condorcet winner. |
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| Keywords: | Mirrlees tax problem Nonlinear income taxation Political economy of taxation Redistributive taxation Voting over tax schedules |
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