Redistribution, Taxes, and the Median Voter
We study a simple model of production, accumulation, and redistribution, where agents
are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted
upon. Though the policy is infinite-dimensional, we prove that a median voter theorem
holds if households have identical, Gorman aggregable preferences; furthermore, the tax
policy preferred by the median voter has the “bang-bang” property.
