Public support for tax policies in COVID-19 times: Evidence from Luxembourg

Javier Olivera and Philippe Van Kerm

No 2021-10, LISER Working Paper Series from Luxembourg Institute of Socio-Economic Research (LISER)

Abstract: We study attitudes towards the introduction of hypothetical new taxes to finance the cost of the COVID-19 pandemic. We rely on survey data collected in Luxembourg in 2020. The survey asks for the agreement of respondents over: a one-time net wealth tax, an inheritance tax, a temporary solidarity income tax, and a temporary increase in VAT. All questions include different and randomly assigned tax attributes (tax rates and exemption amounts). We find a clear divide with relatively high support for new wealth and inheritance taxes on the one hand and a low support for increases in VAT and income taxes on the other hand. While 58% of respondents agree or strongly agree with a one-time tax levied on net worth, only 24% are in favor of a small increase in VAT. Support for any tax is however negatively associated with the size of the tax as measured by the predicted revenues. Our results indicate that a one-time wealth tax could raise substantial revenues and still garner public support.

Keywords: COVID-19; wealth tax; inheritance tax; income tax; VAT; preference for redistribution (search for similar items in EconPapers)
JEL-codes: D31 E62 H20 I38 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2021-11
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-pub
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Journal Article: Public support for tax policies in COVID-19 times: evidence from Luxembourg (2022)
Working Paper: Public support for tax policies in COVID-19 times: Evidence from Luxembourg (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:irs:cepswp:2021-10

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