Working Paper

Majority Voting: A Quantitative Investigation


Abstract: We study the tax systems that arise in a once-and-for-all majority voting equilibrium embedded within a macroeconomic model of inequality. We find that majority voting delivers (i) a small set of outcomes, (ii) zero labor income taxation, and (iii) nearly zero transfers. We find that majority voting, contrary to the literature developed in models without idiosyncratic risk, is quite powerful at restricting outcomes; however, it also delivers predictions inconsistent with observed tax systems.

Keywords: Political Economy; Essential Set; Voting; Inequality; Incomplete Markets;

JEL Classification: D52; D72; E62;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers (Old Series)

Publication Date: 2017-06-17

Number: 1442

Pages: 56 pages