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Federal Reserve Bank of Cleveland
Working Papers (Old Series)
Majority Voting: A Quantitative Investigation
Daniel R. Carroll
James Dolmas
Eric R. Young
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.


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Daniel R. Carroll & James Dolmas & Eric R. Young, Majority Voting: A Quantitative Investigation, Federal Reserve Bank of Cleveland, Working Papers (Old Series) 1442, 07 Jan 2015, revised 17 Jun 2017.
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Keywords: Political Economy; Essential Set; Voting; Inequality; Incomplete Markets
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