“…loyal adherents, but to gain support by voters that have no ideological affinity and make their choice solely dependent on the utility that they derive from an announced redistributive policy. In the context of probabilistic voting models, Coughlin (1986) as well as Dixit and Londregan (1996) show that the existence of party loyalty can imply an equilibrium redistribution scheme where the wealthy, instead of paying high taxes, receive the largest transfer payments. The reason is that parties are tailoring their announced redistributive policies to court 'swing' voters-those with the most wavering party preferences.…”
“…loyal adherents, but to gain support by voters that have no ideological affinity and make their choice solely dependent on the utility that they derive from an announced redistributive policy. In the context of probabilistic voting models, Coughlin (1986) as well as Dixit and Londregan (1996) show that the existence of party loyalty can imply an equilibrium redistribution scheme where the wealthy, instead of paying high taxes, receive the largest transfer payments. The reason is that parties are tailoring their announced redistributive policies to court 'swing' voters-those with the most wavering party preferences.…”
“…There is a significant body of work on positive theories of income distribution and redistribution when all of the voters are selfish (see, for example, work by Coughlin, 1986, Lindbeck and Weibul, 1987, Wittman, 1989, and Bishop et. al., 1991.…”
We consider an election that is solely concerned with redistribution of income. It is well known that when voters are selfish, there is no political equilibrium. We consider the case where voters are modestly altruistic. We demonstrate that modest altruism results in a unique political equilibrium.We also provide an explanation for why voters are much more altruistic than individuals acting alone.
“…We now provide political economy underpinnings for both the lack of commitment and the utilitarian social welfare function. Indeed, efficient allocations of the no-commitment economy can be interpreted as the solution of an explicit political economy game, following the probabilistic voting model along the lines of Coughlin (1986) and Lindbeck and Weibull (1987) which is well known to lead to an outcome that maximizes a utilitarian objective. Our purpose here is to sketch how these arguments adapt to our setting.…”
We study efficient nonlinear taxation of labor and capital in a dynamic Mirrleesian model incorporating political economy constraints. Policies are chosen sequentially over time, without commitment. Our main result is that the marginal tax on capital income is progressive, in the sense that richer agents face higher marginal tax rates.
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