Is There a Demand for Income Tax Progressivity?
9 Pages Posted: 22 Aug 2000
Date Written: June 2000
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 whichmore 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.
Keywords: Voting, Redistribution, Income Tax Progresivity
JEL Classification: D72
Suggested Citation: Suggested Citation