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Why do the poor vote for low tax rates? A (real-effort task) experiment on income redistribution

Natalia Jiménez (), Elena Molis-Bañales () and Angel Solano-Garcia ()
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Elena Molis-Bañales: Departamento de Teoria e Historia Economica, University of Granada & Globe

No 19.12, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: The main purpose of this paper is to shed some light on the voting behavior of low-income voters over income redistribution. To this end, we test a model based on Meltzer and Richard’s (1981) framework through a lab experiment in which individuals vote over two exogenous tax rates and their pre-tax income is determined according to their performance in a real-effort task. We classify individuals into high-skilled and low-skilled participants according to their performance in a tournament at the beginning of the experiment. We find that a large proportion of low-skilled workers vote for the lowest tax rate (the one that gives them the lowest payoff), especially when the alternative tax rate is very high. However, this proportion is significantly reduced in treatments in which the subjects are given extra information about how the tax operates in redistributing income. This result suggests that the lack of information about the role of taxes in income redistribution may be an important factor in explaining the counter-intuitive voting behavior of low-income voters over income redistribution. We also find that both the prospect of upward mobility and the belief in the negative effect of taxes on productivity make low-income voters support low tax rates, especially when the alternative tax rate is very high.

Keywords: income inequality; income redistribution; voting; taxation; real-effort task. (search for similar items in EconPapers)
JEL-codes: C92 D72 H30 J41 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2019-12
New Economics Papers: this item is included in nep-cdm, nep-exp, nep-lma, nep-pbe, nep-pol and nep-pub
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