Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/31290
Authors: 
Carbonell-Nicolau, Oriol
Year of Publication: 
2007
Series/Report no.: 
Working papers // Department of Economics, Rutgers, the State University of New Jersey 2007,06
Abstract: 
We propose a dynamic version of the standard two-party electoral competition model adapted to nonlinear income taxation. The theory has a number of desirable features. First, equilibria always exist, even though the set of admissible tax policies is multidimensional. Second, the Nash set can be characterized generically, and its components give sharp predictions. Third, the features of equilibrium tax policies depend only on empirically meaningful fundamentals. Equilibrium tax schedules benefit the more numerous income groups and place the burden of taxation on income groups with fewer voters. For empirical income distributions, the features of an equilibrium tax schedule are reminiscent of Director's law of public income redistribution (Stigler [36]).
Subjects: 
Nonlinear income taxation
electoral competitionh
Director's law
extensive zero-sum game
JEL: 
H23
H31
D72
D78
Document Type: 
Working Paper

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