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

Javier Olivera and Philippe Van Kerm

International Tax and Public Finance, 2022, vol. 29, issue 6, No 3, 1395-1418

Abstract: 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; Preferences for redistribution (search for similar items in EconPapers)
JEL-codes: D31 E62 H2 I38 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Working Paper: 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 (2021)
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DOI: 10.1007/s10797-022-09744-y

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