Carroll, Daniel R.; Dolmas, Jim; Young, Eric R. - Federal Reserve Bank of Cleveland - 2015
We study the tax systems that arise in a once-and-for-all majority voting equilibrium embedded within a macroeconomic … model of inequality. We find that majority voting delivers (i) a small set of outcomes, (ii) zero labor income taxation, and … (iii) nearly zero transfers. We find that majority voting, contrary to the literature developed in models without …