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Article
Voting for income-immiserizing redistribution in the Meltzer-Richard model
Economics Working Papers (2002–2016)
  • Richard C. Barnett, Iowa State University; Drexel University
  • Joydeep Bhattacharya, Iowa State University
  • Helle Bunzel, Iowa State University
Document Type
Working Paper
Publication Date
7-17-2013
Working Paper Number
WP #13017, September 2013
Abstract

This paper argues that income received via redistributive transfers, unlike labor income, requires no direct sacrifice of leisure; this makes it attractive to many voters even if it leaves them poorer. This point is made within the classic Meltzer and Richard (1981) model wherein heterogeneous voters evaluate an income-redistribution program that finances a lump-sum transfer to all via a distorting income tax. The political-equilibrium policy under majority rule is the tax most preferred, utility-wise, by the median voter. She, and many poorer voters, may support income redistribution that, ironically, leaves them poorer in income terms but with higher utility.

Disciplines
File Format
application/pdf
Length
38 pages
Citation Information
Richard C. Barnett, Joydeep Bhattacharya and Helle Bunzel. "Voting for income-immiserizing redistribution in the Meltzer-Richard model" (2013)
Available at: http://works.bepress.com/helle-bunzel/1/