9 Mars 2020 - Séminaire du LED- Pierre Boyer (Polytechnique-CREST) - Politically feasible reforms of non-linear taxi systems

Date de publication : 14 mars 2020 23:41:37

Authors:Felix Bierbrauer, Pierre Boyer Abstract: We present a conceptual framework for the analysis of politically feasible tax reforms. First, we prove a median voter theorem for monotonic reforms of non-linear tax systems. This yields a characterization of reforms that are preferred by a majority of individuals over the status quo and hence politically feasible. Second, we show that every Pareto-efficient tax system is such that moving towards lower tax rates for below-median incomes and towards higher rates for above median incomes is politically feasible. Third, we develop a method for diagnosing whether a given tax system admits reforms that are politically feasible and/or welfare-improving.