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Voting over Selfishly Optimal Nonlinear Income Tax Schedules with a Minimum-Utility Constraint

Author

Listed:
  • Craig Brett

    (Mount Allison University)

  • John A Weymark

    (Vanderbilt University)

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 (Games and Economic Behavior, forthcoming) by adding a minimum-utility constraint to their incentive-compatibility and government budget constraints. It also extends the analysis of Röell (unpublished manuscript, 2012) and Bohn and Stuart (unpublished manuscript, 2013) by providing a complete characterization of the selfishly optimal tax schedules.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.

Suggested Citation

  • Craig Brett & John A Weymark, 2016. "Voting over Selfishly Optimal Nonlinear Income Tax Schedules with a Minimum-Utility Constraint," Vanderbilt University Department of Economics Working Papers 16-00005, Vanderbilt University Department of Economics.
    • Handle: RePEc:van:wpaper:vuecon-sub-16-00005
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    References listed on IDEAS

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    Cited by:

    1. Felix Bierbrauer & Aleh Tsyvinski & Nicolas Werquin, 2022. "Taxes and Turnout: When the Decisive Voter Stays at Home," American Economic Review, American Economic Association, vol. 112(2), pages 689-719, February.
    2. Brett, Craig & Weymark, John A., 2016. "Voting over selfishly optimal nonlinear income tax schedules with a minimum-utility constraint," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 18-31.
    3. Marcus Berliant & Pierre C. Boyer, 2024. "Politics and income taxes: Progress and progressivity," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(4), August.
    4. Felix J. Bierbrauer & Pierre C. Boyer & Andreas Peichl, 2021. "Politically Feasible Reforms of Nonlinear Tax Systems," American Economic Review, American Economic Association, vol. 111(1), pages 153-191, January.
    5. Craig Brett & John A. Weymark, 2018. "Reducing the dimensionality of a selfishly optimal nonlinear income tax problem," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(2), pages 157-169, October.
    6. Felix Bierbrauer & Aleh Tsyvinski & Nicolas Werquin, 2021. "Taxes and Turnout: When the Decisive Voter Stays at Home," ECONtribute Discussion Papers Series 071, University of Bonn and University of Cologne, Germany.
    7. Craig Brett & John A. Weymark, 2020. "Majority rule and selfishly optimal nonlinear income tax schedules with discrete skill levels," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 54(2), pages 337-362, March.
    8. Laurence Jacquet & Robin Boadway, Craig Brett, 2015. "Optimal Nonlinear Income Taxes with Compensation," THEMA Working Papers 2015-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    9. Darong Dai, 2020. "Voting over selfishly optimal tax schedules: Can Pigouvian tax redistribute income?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1660-1686, September.
    10. Brett, Craig & Weymark, John A., 2017. "Voting over selfishly optimal nonlinear income tax schedules," Games and Economic Behavior, Elsevier, vol. 101(C), pages 172-188.
    11. Darong Dai & Guoqiang Tian, 2023. "Voting over selfishly optimal income tax schedules with tax-driven migrations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 60(1), pages 183-235, January.
    12. Felix Bierbrauer & Aleh Tsyvinski & Nicolas Werquin, 2021. "Taxes and Turnout: When the Decisive Voter Stays at Home," CESifo Working Paper Series 8954, CESifo.
    13. Carmen Beviá & Luis Corchón & Antonio Romero-Medina, 2017. "Relinquishing power, exploitation and political unemployment in democratic organizations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 735-753, December.

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    More about this item

    Keywords

    Mirrlees tax problem; nonlinear income taxation; political economy of taxation; redistributive taxation; voting over tax schedules;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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