Effects of signalling tax evasion on redistribution and voting preferences: Evidence from the Panama Papers

Laila Ait Bihi Ouali

PLOS ONE, 2020, vol. 15, issue 3, 1-22

Abstract: This paper provides empirical evidence that individuals substantially revise their stated wealth redistribution preferences after fiscal scandals. The 2016 Panama Papers scandal revealed top-income tax evasion behaviour simultaneously worldwide. The empirical investigation exploits this event as a quasi-natural experiment. I rely on two original datasets, a UK household longitudinal dataset and a survey conducted in 22 European countries. I use a difference-in-differences strategy and find that pro-redistribution statements increased between 2% and 3.3% after the scandal. Responses are heterogeneous and larger for right-wing individuals and low-income individuals. This change in wealth redistribution preferences is likely to have been translated into a slight change in votes. The results suggest an increase in stated voting intentions for the left and a decrease for the right. Complementary estimations reveal that more media coverage and more individuals involved by country increase the magnitude of the response.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0229394

DOI: 10.1371/journal.pone.0229394

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