Popular support for progressive taxation and the relative income hypothesis

Mitra, Tapan; Ok, Efe A.; Koçkesen, Levent

doi:10.1016/s0165-1765(97)00260-7

Cited by 14 publications

(6 citation statements)

References 18 publications

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“…Yet the poor here are often said to be much less content with their lot than are the upper-middle class citizens of many poorer nations.'' 3 In the context of income taxation and public policy, for instance, the implications of the relative income hypothesis are analyzed by Boskin and Sheshinski (1978), Layard (1980), Oswald (1983), Ng (1987), Villar (1988), Blomquist (1993), and Mitra et al (1997). Related applications to the theory of asset pricing include Abel (1990) and Galõ Â (1994).…”

Section: Introductionmentioning

confidence: 99%

Negatively interdependent preferences

Ok¹,

Koçkesen²

2000

Social Choice and Welfare

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Abstract. We develop a theory of representation of interdependent preferences that re¯ect the widely acknowledged phenomenon of keeping up with the Joneses (i.e. of those preferences which maintain that well-being depend oǹ`r elative standing'' in the society as well as on material consumption). The principal ingredient of our analysis is the assumption that individuals desire to occupy a (subjectively) better position than their peers. This is quite a primitive starting point in that it does not give any reference to what is actually regarded as``status'' in the society. We call this basic postulate negative interdependence, and study its implications. In particular, combining this assumption with some other basic postulates that are widely used in a number of other branches of the theory of individual choice, we axiomatize the relative income hypothesis, and obtain an operational representation of interdependent preferences.

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Section: Introductionmentioning

confidence: 99%

Negatively interdependent preferences

Ok¹,

Koçkesen²

2000

Social Choice and Welfare

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“…Firstly we can abandon the Downsian assumption that parties are only interested to win election, but the problem is that the Condorcet winner may not be selected if it exists. Secondly, we can keep the Downsian approach but adopt alternative solution concepts that are Condorcet consistent in the sense that they will pick the Condorcet winner if any as the unique outcome of the game (examples of such solution concepts are the uncovered set,the minimal covering set, the Bipartisan set and the Banks set) 6 . Thirdly we can adopt alternative rules for the voting game.…”

Section: Discussionmentioning

confidence: 99%

Is there a demand for income tax progressivity?

Hindriks¹

2001

Economics Letters

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Recently Marhuenda and Ortuno-Ortin (1995) have provided a popular support for progressivity theorem that says that a marginal progressive tax always defeats a marginal regressive tax as long as individuals vote for the tax scheme minimizing their tax liabilities and the median income is less than the mean income. In this paper we provide, under similar circumstances, a popular support for regressivity theorem according to which more marginal regressivity (or less marginal progressivity) can always defeat any existing tax scheme. This move towards more regressivity (or less progressivity) is supported by the extremes of the income distribution. Combining this result with Marhuenda and Ortuno-Ortin' result implies that vote cycling is inevitable and that the demand for progressivity cannot be established in the standard Downsian framework with self-interested voters.

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“…Tapan Mitra, Efe A. Ok, and Levent Koçkesen generalize this result, allowing for incentive effects and for relative income preferences. 81 The authors show that progressive rate schedules still generally prevail over regressive ones under these alternative conditions. 82 However, the approach taken in this Part is different in one important respect.…”

Section: Asymmetric Instability Of Marginal Rate Schedulesmentioning

confidence: 98%

Modelling of a relative income tax bracket-based progression with the effect of a slower tax burden growth

Lapov

Mayburov

2021

JTR

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This study aims to model the distribution of the tax burden in schedular progressive taxation and to describe the key characteristics of such models, in particular their differences from the models based on continuously increasing smooth functions of the relationship between the tax burden and the taxpayer's income. Our hypothesis is that the use of the Gompertz function to model the main indicators of tax burden distribution of the schedular progressive income tax will help us approximate and formalize the distribution of the tax burden in a relative income tax bracket-based progression. Our research relies on the hypothetico-deductive model, more specifically, on mathematical hypothesis testing. The methodological framework comprises models of progressive taxation and mathematical methods, including data approximation based on the use of the Gompertz function, analysis of the antiderivative and convexity of functions and their properties. The resulting model can be used to describe the dynamic characteristics of the relationship between the tax burden and certain parameters of schedular taxation. This model can help identify the level of income beyond which the progression of the tax burden becomes formal and does not generate commensurately high revenue growth. The existence of such income level results in what can be considered the key drawback of the relative progression in question – the impossibility to provide a significant difference (step) of the tax burden progression in the whole interval of the taxpayer's income. What makes this research practically significant is that the proposed methodology allows us to take into account the actual tax burden in modelling the parameters of the relative progression.

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Popular support for progressive taxation and the relative income hypothesis

Cited by 14 publications

References 18 publications

Negatively interdependent preferences

Negatively interdependent preferences

Is there a demand for income tax progressivity?

Modelling of a relative income tax bracket-based progression with the effect of a slower tax burden growth

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