Changing social preferences and optimal redistributive taxation by Jang-Ting Guo and Alan Krause
By: Guo, Jang Ting
.
Contributor(s): Krause, Alan.
Material type: 
ArticlePublisher: 2018Subject(s): IMPOSICION OPTIMA | RENTA | REDISTRIBUCION | MODELOS ECONOMETRICOSOnline resources: Click here to access online
In:
Oxford Economic Papers v. 70, n. 1, January 2018, p. 73-92Summary: We examine a dynamic model of optimal nonlinear taxation of labour income and savings, in which there are two political parties: left-wing and right-wing. The parties differ only in their redistributive preferences, with the left-wing party having a stronger preference for redistribution. Our analysis explicitly considers the possibility that society’s preference for redistribution may change, as reflected in its future voting
behaviour. The incumbent government respects the possibility that society’s preference may change, and sets taxes to maximize expected social welfare. Our main result is that an incumbent left-wing (resp. right-wing) government will
implement a regressive (resp. progressive) savings tax policy. The incumbent government implements this policy not out of self-interest, but to accommodate the redistributive goals of the opposing party.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 286/2018/1-1 (Browse shelf) | Available | OP 286/2018/1-1 |
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Resumen.
We examine a dynamic model of optimal nonlinear taxation of labour income and savings, in which there are two political parties: left-wing and right-wing. The parties differ only in their redistributive preferences, with the left-wing party having a stronger preference for redistribution. Our analysis explicitly considers the possibility that society’s preference for redistribution may change, as reflected in its future voting
behaviour. The incumbent government respects the possibility that society’s preference may change, and sets taxes to maximize expected social welfare. Our main result is that an incumbent left-wing (resp. right-wing) government will
implement a regressive (resp. progressive) savings tax policy. The incumbent government implements this policy not out of self-interest, but to accommodate the redistributive goals of the opposing party.
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