Working Paper

Redistribution, taxes, and the median voter


Abstract: We study a simple model of production, accumulation, and redistribution, where agents are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted upon. Though the policy is infinite-dimensional, we prove that a median voter theorem holds if households have identical, Gorman aggregable preferences; furthermore, the tax policy preferred by the median voter has the ?bang- bang? property.

Keywords: Taxation; Wealth;

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Authors

    Bassetto, Marco

    Benhabib, Jess

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Working Paper Series

Publication Date: 2006

Number: WP-06-02