TY - BOOK AU - Agranov,Marina AU - Palfrey,Thomas R. ED - National Bureau of Economic Research. TI - The Effects of Income Mobility and Tax Persistence on Income Redistribution and Inequality T2 - NBER working paper series PY - 2016/// CY - Cambridge, Mass. PB - National Bureau of Economic Research N1 - October 2016; Hardcopy version available to institutional subscribers N2 - We explore the effect of income mobility and the persistence of redistributive tax policy on the level of redistribution in democratic societies. An infinite-horizon theoretical model is developed, and the properties of the equilibrium tax rate and the degree of after-tax inequality are characterized. Mobility and stickiness of tax policy are both negatively related to the equilibrium tax rate. However, neither is sufficient by itself. Social mobility has no effect on equilibrium taxes if tax policy is voted on in every period, and tax persistence has no effect in the absence of social mobility. The two forces are complementary. Tax persistence leads to higher levels of post-tax inequality, for any amount of mobility. The effect of mobility on inequality is less clear-cut and depends on the degree of tax persistence. A laboratory experiment is conducted to test the main comparative static predictions of the theory, and the results are generally supportive UR - https://www.nber.org/papers/w22759 UR - http://dx.doi.org/10.3386/w22759 ER -