Social Preferences and Tax Policy Design: Some Experimental Evidence

Ackert, Lucy F.; Martínez-Vázquez, Jorge; Rider, Mark

doi:10.1111/j.1465-7295.2007.00048.x

Cited by 74 publications

(68 citation statements)

References 29 publications

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“…Later work focuses on individual choices for redistributive systems and documents heterogeneity in redistributive preferences. Some studies argue that redistribution is mainly determined by self-interest (Hoffman & Spitzer (1985), Durante et al (2014)), while other stress the role of social preferences (Tyran & Sausgruber (2006), Ackert et al (2007), Schildberg-Hoerisch (2010), Balafoutas et al (2013)). Klor & Shayo (2010) study the effect of group identity on redistribution and show that subjects tend to opt for redistribution which favors their group.…”

Section: Literature Reviewmentioning

confidence: 99%

Political self-serving bias and redistribution

Deffains

Espinosa

Thöni

2016

Journal of Public Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe explore the impact of the self-serving bias on the supply and demand for redistribution. We present results from an experiment in which participants decide on redistribution after performing a real effort task. Dependent on individual performance, participants are divided into two groups, successful and unsuccessful. Participants' success is exogenously determined, because they are randomly assigned to either a hard or easy task. However, because participants are not told which task they were assigned to, there is ambiguity as to whether success or failure should be attributed to internal or external factors. Participants take two redistribution decisions. First, they choose a supply of redistribution in a situation where no personal interests are at stake. Second, they choose a redistributive system behind a veil of ignorance. Our results confirm and expand previous findings on the self-serving bias: successful participants are more likely to attribute their success to their effort rather than luck, and they opt for less redistribution. Unsuccessful participants tend to attribute their failure to external factors and opt for more redistribution. We demonstrate that the self-serving bias contributes to a polarization of the views on redistribution.JEL codes: K10, H3.

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Section: Literature Reviewmentioning

confidence: 99%

Political self-serving bias and redistribution

Deffains

Espinosa

Thöni

2016

Journal of Public Economics

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“…With the well-known 'leaky bucket' experiment, respondents are able to transfer money from a rich individual to a poor one but incur a loss of money in the process, so that the equity-efficiency trade-off is taken into account in measuring tastes for redistribution (see for instance Amiel et al, 1999); in recent experiments, participants have voted for alternative tax structures (e.g. Ackert et al, 2007). Finally, in the public economic literature, implicit value judgments may be drawn from inequality measures, assuming a natural rate of subjective inequality (see Lambert et al, 2003, Duclos, 2000.…”

Section: Related Literaturementioning

confidence: 99%

Comparing inequality aversion across countries when labor supply responses differ

Bargain

Dolls

Neumann

et al. 2013

Int Tax Public Finance

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu We analyze to which extent social inequality aversion differs across nations when controlling for actual country differences in labor supply responses. Towards this aim, we estimate labor supply elasticities at both extensive and intensive margins for 17 EU countries and the US. Using the same data, inequality aversion is measured as the degree of redistribution implicit in current tax-benefit systems, when these systems are deemed optimal. We find relatively small differences in labor supply elasticities across countries. However, this changes the cross-country ranking in inequality aversion compared to scenarios following the standard approach of using uniform elasticities. Differences in redistributive views are significant between three groups of nations. Labor supply responses are systematically larger at the extensive margin and often larger for the lowest earnings groups, exacerbating the implicit Rawlsian views for countries with traditional social assistance programs. Given the possibility that labor supply responsiveness was underestimated at the time these programs were implemented, we show that such wrong perceptions would lead to less pronounced and much more similar levels of inequality aversion. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: H11, H21, D63, C63

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“…Ackert et al (2007) conduct experiments to examine whether individuals are driven by inequality aversion when choosing between different taxes. Their results reveal that in most cases the majority votes for the progressive tax and that it is not necessarily a median voter-being indifferent in monetary terms-who is decisive.…”

Section: Macro-economic Indicatorsmentioning

confidence: 99%

Progressive taxation and tax morale

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 5378 December 2010 ABSTRACT Progressive Taxation and Tax Morale *As the link between tax compliance and tax morale is found to be robust, finding the determinants of tax morale can help to understand and fight tax evasion. In this paper we analyze the effect of progressive taxation on tax morale in a cross-country approach -which has not been investigated before. Our theoretical analysis leads to two testable predictions. First, an individual's tax morale is higher, the more progressive the tax schedule is. Second, the impact of tax progressivity on tax morale is declining in income. In our empirical analysis, we make use of a unique dataset of tax progressivity measures and follow most of the tax morale literature by employing the World Values Survey to measure tax morale. Controlling for a wide range of variables, we confirm both hypotheses in our empirical analysis.JEL Classification: H26, H24, D7, D31

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Social Preferences and Tax Policy Design: Some Experimental Evidence

Cited by 74 publications

References 29 publications

Political self-serving bias and redistribution

Political self-serving bias and redistribution

Comparing inequality aversion across countries when labor supply responses differ

Progressive taxation and tax morale

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