We consider a repeated electoral competition game between two parties, each representing a constituent with a given income level. Parties are unable to commit to any policy before the election; they choose a non-linear income tax schedule once elected. In each period, citizens cast a vote either...

This paper studies majority voting over non-linear income taxes when individuals respond to taxation by substituting untaxable leisure to taxable labor. We first show that voting cycle over progressive and regressive taxes is inevitable. This is because the middle-class can always lower its tax...

We analyze the relation between tax enforcement, aggregate output and government revenue when imperfectly competitive firms evade a specific output tax. We show that aggregate output decreases with tax enforcement. Government revenue increases with enforcement when the tax is low. When the tax...