Preferences over Taxation of High Income Individuals: Evidence from a Survey Experiment

Dirk Engelmann, Eckhard Janeba, Lydia Mechtenberg and Nils Wehrhöfer

VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy from Verein für Socialpolitik / German Economic Association

Abstract: Mobility of high income individuals across borders puts pressure on governments to lower taxes. A central tenet of the underlying theoretical and empirical models is that mobile individuals react to tax differentials through migration, and in turn immobile households vote for lower taxes in the face of a migration threat. In light of behavioural economics research it is not clear, however, whether this premise holds. In particular, political ideology might influence voting on taxes. We use an experimental survey design and elicit answers from more than 3,000 households in the German Internet Panel (GIP).We use various treatments to understand the role of mobility and ideology in tax choice. We observe substantial deviations from the predicted theoretical equilibrium. In many cases comparative static results prevail, however. Furthermore, political ideology matters: left-leaning households choose higher taxes than right-leaning persons, and center-right leaning individuals tend to emigrate more when the tax at home is high.

Keywords: taxation; mobility; ideology; survey experiments (search for similar items in EconPapers)
JEL-codes: H21 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eur, nep-pbe and nep-pub
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Related works:
Journal Article: Preferences over taxation of high-income individuals: Evidence from a survey experiment (2023)
Working Paper: Preferences over Taxation of High-Income Individuals: Evidence from a Survey Experiment (2021)
Working Paper: Preferences over Taxation of High-Income Individuals: Evidence from a Survey Experiment (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc19:203648

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