Title

Voting for income-immiserizing redistribution in the Meltzer-Richard model

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

2014

Journal or Book Title

Economic Inquiry

Volume

52

Issue

2

First Page or Article ID Number

682

Last Page

695

DOI

10.1111/ecin.12059

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. Ironically, this voter, and many poorer voters, may support a redistribution policy that leaves them poorer in income terms but with higher utility.

JEL Classification

D72, E6, H2

Comments

This is a working paper of an article published in in Economic Inquiry, Vol. 52 iss. 2 (April 2014): 682, doi: 10.1111/ecin.12059