Voting under temptation

Within the confines of linear tax and complete market, we show that the efficiency force for a negative capital tax may not be strong enough to reverse the politico-economic force for a positive redistributive taxation under temptation and self-control preferences.

► We construct a voting model on capital tax with Gul-Pesendorfer preferences. ► Important aspects of political support of a redistributive tax have been discussed. ► As temptation grows, the political support for subsidy on capital increases. ► Interestingly, poor dislikes subsidy despite its temptation reducing benefits.