Do Justice Perceptions Support the Concept of Equal Sacrifice? Evidence from Germany

Maria Metzing

No 1002, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: The ability-to-pay approach assesses taxes paid as a sacrifice by the taxpayers. This raises the question of how to define and how to measure it: in absolute, relative, or marginal terms? U.S. respondents prefer a tax schedule that is either a pure (absolute) Equal Sacrifice or a mixture of Equal Sacrifice and Utilitarianism [Weinzierl, 2014]. To determine whether Germans prefer absolute, relative, or marginal Equal Sacrifice principle for their income taxation, I use a question item from the German Socio-Economic Panel (SOEP) to obtain information on the level of taxes individuals consider as fair. I estimate tax and transfer schedules with regard to three Equal Sacrifice definitions and analyze which one of the three best fits the data. The absolute and the relative Equal Sacrifice principle are the dominant candidates in terms of statistical fit.

Keywords: Equal Sacrifice; Optimal Taxation; Fair Taxation (search for similar items in EconPapers)
JEL-codes: D63 H21 (search for similar items in EconPapers)
Pages: 32 p.
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp1002

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