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Article
Redistribution, Taxes, and the Median Voter
Review of Economic Dynamics (2006)
  • Marco Bassetto, Federal Reserve Bank of Chicago
  • Jess Benhabib, New York University
Abstract

We study a simple model of production, accumulation, and redistribution, where agents are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted upon. Though the policy is infinite-dimensional, we prove that a median voter theorem holds if households have identical, Gorman aggregable preferences; furthermore, the tax policy preferred by the median voter has the “bang-bang” property.

An older version with some typos is available as Federal Reserve Bank of Chicago Working Paper 2006-02.

Disciplines
Publication Date
April, 2006
Citation Information
Marco Bassetto and Jess Benhabib. "Redistribution, Taxes, and the Median Voter" Review of Economic Dynamics Vol. 9 Iss. 2 (2006)
Available at: http://works.bepress.com/bassetto/3/