Politically Feasible Reforms of Non-Linear Tax Systems

Présentation de Pierre Boyer (CREST, École Polytechnique, Université Paris-Saclay)

Présentation de Pierre Boyer du 4 décembre 2017

En collaboration avec / Joint with : Felix Bierbrauer (Université de Köln)

Résumé / 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 systems 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 welfare-improving and/ or politically feasible.

Download : 17-12-04_cesifo1_wp6573.pdf