Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267274 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10041
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper begins with a survey of the literature on the political economy approaches to labor income taxation. We focus on recent progress made by examining in detail the specific properties of non-linear taxes derived in the context of voting. Next, we present new results on the existence of majority voting equilibrium that unify work in the standard framework. Finally, we discuss how recent theoretical results help us uncover empirical patterns from the last 50 years in the US tax system, namely a sharp decrease in top marginal tax rates, the rise of the Earned Income Tax Credit (EITC), and increased progressivity in the middle of the income distribution.
Subjects: 
non-linear income taxation
tax reform
political economy
optimal taxation
EITC
JEL: 
C72
D72
D82
H21
Document Type: 
Working Paper
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