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The value of progressivity: Evidence from survey experiments

Benoît Tarroux ()

Economics Working Paper Archive (University of Rennes 1 & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS

Abstract: The aim of this paper is to investigate how people value tax progressivity. More precisely, I study the potential trade-off between improvement of the final income distribution and progressivity of the tax schedule. To do this, I designed survey experiments, in which respondents are asked to rank different taxation-redistribution schemes in different treatments differing in terms of information availability: (1) when only information about final incomes is provided; (2) when information about average tax rates is also available. Using a within-subject design, the instability of ranking between (1) and (2) indicates whether or not they value tax progressivity. The main result is that respondents have a strong preference for tax progressivity, that is, they accept to worsen the final income distribution in exchange for tax progressivity. This finding is robust to two experimental variations: First, the mere fact of providing a new information can not account for this finding; Second, providing information pieces about pre-tax incomes and tax liabilities does not affect the preference for progressive taxation.

Keywords: Tax progressivity; Optimal taxation; Survey experiment (search for similar items in EconPapers)
JEL-codes: D63 H21 C9 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-exp and nep-pbe
Date: 2017-11
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Persistent link: https://EconPapers.repec.org/RePEc:tut:cremwp:2017-13

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