Political Income Redistribution

This article discusses political income redistribution, beginning with a section on a simple but widely used class of models. These models have a menu of redistributive options that is artificially restricted by limiting taxes and transfers to schemes that make post-tax income a deterministic and non-decreasing function of pre-tax income. The article next discusses models that put emphasis on the potential instability of redistributive politics and models that have built-in sources of stability. The final section focuses on several models of redistributive politics that try to explain the choice of redistributive instruments despite the availability of more efficient alternatives.