Document Type

Working Paper

Publication Date

7-17-2013

Working Paper Number

WP #13017, September 2013

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. She, and many poorer voters, may support income redistribution that, ironically, leaves them poorer in income terms but with higher utility.

Publication Status

Published in Economic Inquiry, Vol. 52 iss. 2 (April 2014): 682-695.

JEL Classification

H2, E6, D72

File Format

application/pdf

Length

38 pages

Included in

Economics Commons

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