The Democratic Political Economy of Progressive Income Taxation

UC Davis Working Paper #97-11

Posted: 15 Apr 1997

See all articles by John E. Roemer

John E. Roemer

Yale University - Department of Political Science; Yale University - Cowles Foundation

Date Written: March 1997


Why do both left and right political parties almost always propose progressive income taxation schemes in political competition? Analysis of this problem has been hindered by the two-dimensionality of the issue space. To give parties a choice over a domain which contains both progressive and regressive policies requires an issue space that is at least two-dimensional. Nash equilibrium between two parties with (complete) preferences over two-dimensional policies fails to exist. I introduce a new equilibrium concept for political games, based on inner-party struggle. A party consists of three factions--reformists, militants, and opportunists: each faction has a complete preference order on policy space, but together they can only agree on a partial order. Inner-party unity equilibrium is defined as Nash equilibrium between two parties, each of which maximizes with respect to its quasi- order. Such equilibria exist in the two-dimensional model, and in them both parties propose progressive income taxation.

JEL Classification: D72, H20

Suggested Citation

Roemer, John E., The Democratic Political Economy of Progressive Income Taxation (March 1997). UC Davis Working Paper #97-11, Available at SSRN:

John E. Roemer (Contact Author)

Yale University - Department of Political Science ( email )

Box 208269
New Haven, DC 06520-8269
United States
203-432-5249 (Phone)
203-432-6196 (Fax)


Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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