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Voting on Redistribution with Tax Evasion

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  • Rainald Borck

Abstract

This paper analyzes voting on a linear income tax which is redistributed lump sum to the taxpayers. Individuals can evade taxes, which leads to penalties if evasion is detected. Since preferences satisfy neither single peakedness nor single crossing, an equilibrium may not exist. When it does exist, it may have interesting properties, in particular, the poor and the rich may form a coalition against the middle class.

Suggested Citation

  • Rainald Borck, 2003. "Voting on Redistribution with Tax Evasion," Discussion Papers of DIW Berlin 329, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp329
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    References listed on IDEAS

    as
    1. Christian Traxler, 2009. "Voting over taxes: the case of tax evasion," Public Choice, Springer, vol. 140(1), pages 43-58, July.
    2. Borck, Rainald, 2004. "Stricter enforcement may increase tax evasion," European Journal of Political Economy, Elsevier, vol. 20(3), pages 725-737, September.
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Leroux, Marie-Louise & Maldonado, Dario & Pestieau, Pierre, 2019. "The political economy of contributive pensions in developing countries," European Journal of Political Economy, Elsevier, vol. 58(C), pages 262-275.
    2. Adam, Antonis & Kammas, Pantelis, 2011. "Redistribution through tax evasion," MPRA Paper 34803, University Library of Munich, Germany.
    3. Besfamille, Martin & De Donder, Philippe & Lozachmeur, Jean-Marie, 2009. "The Political Economy of the (Weak) Enforcement of Sales Tax," CEPR Discussion Papers 7108, C.E.P.R. Discussion Papers.
    4. Ingar K. Haaland & Andreas Olden, 2022. "Fraud Concerns and Support for Economic Relief Programs," CESifo Working Paper Series 9925, CESifo.
    5. Rainald Borck, 2007. "Voting, Inequality And Redistribution," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 90-109, February.
    6. Di Gioacchino, Debora & Sabani, Laura & Tedeschi, Simone, 2019. "Individual preferences for public education spending: Does personal income matter?," Economic Modelling, Elsevier, vol. 82(C), pages 211-228.
    7. Ana I. Moro Egido & Angel Solano Garcia, 2015. "The Ends Against the Middle. Attitudes Towards Taxation," ThE Papers 15/03, Department of Economic Theory and Economic History of the University of Granada..
    8. Bernasconi, Michele, 2006. "Redistributive taxation in democracies: Evidence on people's satisfaction," European Journal of Political Economy, Elsevier, vol. 22(4), pages 809-837, December.
    9. Radhika Lahiri & Mark Phoon, 2012. "Tax Evasion, Inequality and Progressive Taxes: A Political Economy Perspective Joseph," School of Economics and Finance Discussion Papers and Working Papers Series 296, School of Economics and Finance, Queensland University of Technology.
    10. Campomanes, Ignacio P., 2024. "The political economy of inequality, mobility and redistribution," Journal of Macroeconomics, Elsevier, vol. 79(C).
    11. Haaland, Ingar & Olden, Andreas, 2021. "Information about Fewer Audits Reduces Support for Economic Relief Programs," Discussion Papers 2021/2, Norwegian School of Economics, Department of Business and Management Science.
    12. repec:ebl:ecbull:v:8:y:2004:i:5:p:1-9 is not listed on IDEAS
    13. Traxler, Christian, 2012. "Majority voting and the welfare implications of tax avoidance," Journal of Public Economics, Elsevier, vol. 96(1), pages 1-9.
    14. Adam, Antonis & Kammas, Pantelis, 2012. "(Tax evasion) power to the people: does "early democratization" increase the size of the informal sector?," MPRA Paper 43343, University Library of Munich, Germany.
    15. Carlos Bethencourt & Lars Kunze, 2015. "The political economics of redistribution, inequality and tax avoidance," Public Choice, Springer, vol. 163(3), pages 267-287, June.
    16. An, Zhiyong, 2013. "An alternative approach to income taxation," Economic Modelling, Elsevier, vol. 30(C), pages 875-878.
    17. Haaland, Ingar & Olden, Andreas, 2022. "Fraud concerns and support for economic relief programs," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 59-66.
    18. Borck, Rainald, 2004. "Stricter enforcement may increase tax evasion," European Journal of Political Economy, Elsevier, vol. 20(3), pages 725-737, September.
    19. Rainald Borck, 2004. "Income Tax Evasion and the Penalty Structure," Economics Bulletin, AccessEcon, vol. 8(5), pages 1-9.
    20. Oscar Mauricio VALENCIA ARANA, 2010. "Economic Growth and Optimal Income Tax Evasion," EcoMod2004 330600147, EcoMod.
    21. Marie-Louise Leroux & Dario Maldonado & Pierre Pestieau, 2015. "Compliance, Informality and Contributive Pensions," CIRANO Working Papers 2015s-52, CIRANO.
    22. Marie-Louise Leroux & Dario Maldonado & Pierre Pestieau, 2015. "Contributive Pensions and Imperfect Tax Compliance: A Political Economy Model," CESifo Working Paper Series 5656, CESifo.
    23. Weinreich, Daniel, 2013. "Fair tax evasion and majority voting over redistributive taxation," MPRA Paper 48919, University Library of Munich, Germany.

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    More about this item

    Keywords

    Tax evasion; redistribution; voting;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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