Immigration and Majority Voting on Income Redistriubtion-Is there a Case for Opposition from Natives?

Abstract

This paper examines the effect of immigration on the level of income redistribution via majority voting on the income tax. As a main result, we derive multiple tax equilibria if immigrants are allowed to vote and the skill composition of natives is not too homogeneous. In this case, the outcome of a native referendum on giving immigrants the right to vote would be negative, since immigrants could overthrow the native majority and change the tax rate that is utility-maximising for natives. It is found that at best, natives are indifferent towards immigrant voting, and the outcome of a corresponding referendum would be indeterminate.Political Economy; Immigration; Income Redistribution