Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75952
Authors: 
Grossmann, Volker
Year of Publication: 
2002
Series/Report no.: 
CESifo Working Paper 731
Abstract: 
According to a standard argument, higher income inequality fosters redistributive activities of the government in favor of the median income earner. This paper shows that if redistribution is achieved by a public provision of goods and services rather than by transfers, higher income inequality may imply a smaller size of the government in majority voting equilibrium. In addition to a static voting model, an endogenous growth model is analyzed to examine the role of saving decisions of heterogeneous individuals for both the distributional incidence of proportional factor income taxes and the voting outcome.
Subjects: 
income distribution
public consumption
majority voting
investment-driven growth
Document Type: 
Working Paper

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