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
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: C9 D63 H21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-exp and nep-pbe
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