Abstract
Abstract For models of majority voting over fixed-income taxations, we mathematically define the concept of least core. We provide a sufficient condition on the policy space such that the least core is not empty. In particular, we show that the least core is not empty for the framework of quadratic taxation, respectively piecewise linear tax schedules. For fixed-income quadratic taxation environments with no Condorcet winner, we prove that for sufficiently right-skewed income distribution functions, the least core contains only taxes with marginal-rate progressivity.
Highlights
The literature of the positive theory of income taxation regards the tax schemes in democratic societies as emerging, explicitly or implicitly, from majority voting
In Theorem 2, we show that for fixed-income quadratic taxation environments with no Condorcet winner, and for sufficiently right-skewed income distribution functions, the least core is characterized by taxes with marginalrate progressivity
We prove that, when a Condorcet winner does not exist, for sufficiently right-skewed income distribution functions, the least core is characterized by marginal progressivity as well
Summary
The literature of the positive theory of income taxation regards the tax schemes in democratic societies as emerging, explicitly or implicitly, from majority voting (see Romer [1,2], Roberts [3], Cukierman and Meltzer [4], Marhuenda and Ortuño-Ortin [5,6]). In Theorem 2, we show that for fixed-income quadratic taxation environments with no Condorcet winner, and for sufficiently right-skewed income distribution functions, the least core is characterized by taxes with marginalrate progressivity. This result seems in line with the heuristic argument commonly invoked to explain the prevalence of the marginal-rate progressivity, that is, the number of relatively poor (self-interest) voters exceeds that of richer ones. The result argues in favor of the fact that analyzing the least core in particular fixed-income taxation models can provide useful insights on the major questions of the positive theory of income taxation
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