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Do Americans want to tax wealth? Evidence from online surveys

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  • Fisman, Raymond
  • Gladstone, Keith
  • Kuziemko, Ilyana
  • Naidu, Suresh

Abstract

A vast theoretical literature in public finance has studied the desirability of capital taxation. This discussion largely ignores the political feasibility of taxing wealth. We provide, to our knowledge, the first investigation of individuals' preferences over jointly taxing income and wealth. We provide subjects with a set of hypothetical individuals' incomes and wealth and elicit subjects' preferred (absolute) tax bill for each individual. Our method allows us to unobtrusively map both income earned and accumulated wealth into desired tax levels. Our regression results yield roughly linear desired tax rates on income of about 14%. Respondents' suggested tax rates indicate positive desired wealth taxation. When we distinguish between sources of wealth we find that, in line with recent theoretical arguments, subjects' implied tax rate on wealth is 3% when the source of wealth is inheritance, far higher than the 0.8% rate when wealth is from savings. Textual analysis of respondents' justifications for their tax rates imply limited concern for the elasticity of tax bases with respect to net-of-tax rates.

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  • Fisman, Raymond & Gladstone, Keith & Kuziemko, Ilyana & Naidu, Suresh, 2020. "Do Americans want to tax wealth? Evidence from online surveys," Journal of Public Economics, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:pubeco:v:188:y:2020:i:c:s0047272720300712
    DOI: 10.1016/j.jpubeco.2020.104207
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    1. Charité, Jimmy & Fisman, Raymond & Kuziemko, Ilyana & Zhang, Kewei, 2022. "Reference points and redistributive preferences: Experimental evidence," Journal of Public Economics, Elsevier, vol. 216(C).
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    6. Elisa Stumpf & Silke Uebelmesser, 2024. "Lifting the Veil of Ignorance – Survey Experiments on Preferences for Wealth Redistribution," CESifo Working Paper Series 11126, CESifo.
    7. Heap, Shaun P. Hargreaves & Koop, Christel & Matakos, Konstantinos & Unan, Asli & Weber, Nina Sophie, 2021. "We Cannot Disagree Forever! Reality Polarization and Citizens’ Post-Pandemic Fiscal Adjustment Preferences," SocArXiv 69tup, Center for Open Science.
    8. Brittney Goodrich & Marieke Fenton & Jerrod Penn & John Bovay & Travis Mountain, 2023. "Battling bots: Experiences and strategies to mitigate fraudulent responses in online surveys," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(2), pages 762-784, June.
    9. Javier Olivera & Philippe Kerm, 2022. "Public support for tax policies in COVID-19 times: evidence from Luxembourg," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(6), pages 1395-1418, December.
    10. Spencer Bastani & Daniel Waldenström, 2020. "How Should Capital Be Taxed?," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 812-846, September.
    11. Lang, Corey & Qiu, Yueming (Lucy) & Dong, Luran, 2023. "Increasing voluntary enrollment in time-of-use electricity rates: Findings from a survey experiment," Energy Policy, Elsevier, vol. 173(C).
    12. Ferreira, João V. & Ramoglou, Stratos & Savva, Foivos & Vlassopoulos, Michael, 2024. ""Should CEOs' Salaries Be Capped?" A Survey Experiment on Limitarian Preferences," IZA Discussion Papers 17171, Institute of Labor Economics (IZA).
    13. Hope, David & Limberg, Julian & Weber, Nina, 2023. "Why do (some) ordinary Americans support tax cuts for the rich? Evidence from a randomised survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    14. Markina Oksana, 2022. "Taxation, Inequality, and Poverty: Evidence from Ukraine," Central European Economic Journal, Sciendo, vol. 9(56), pages 1-18, January.
    15. Margit Schratzenstaller, 2023. "Behavioral Responses to Inheritance Taxation. A Review of the Empirical Literature," WIFO Working Papers 668, WIFO.
    16. Chirvi, Malte & Schneider, Cornelius, 2020. "Preferences for wealth taxation: Design, framing and the role of partisanship," arqus Discussion Papers in Quantitative Tax Research 260, arqus - Arbeitskreis Quantitative Steuerlehre.
    17. Eiji Yamamura, 2021. "Information of income position and its impact on perceived tax burden and preference for redistribution: An Internet Survey Experiment," Papers 2106.11537, arXiv.org.
    18. Hope, David & Limberg, Julian & Weber, Nina Sophie, 2021. "Why Do (Some) Ordinary Americans Support Tax Cuts for the Rich? Evidence From a Randomized Survey Experiment," SocArXiv chk9b, Center for Open Science.
    19. Spencer Bastani & Daniel Waldenström, 2021. "Perceptions of Inherited Wealth and the Support for Inheritance Taxation," Economica, London School of Economics and Political Science, vol. 88(350), pages 532-569, April.
    20. Eiji Yamamura, 2021. "The Effect of Providing Peer Information on Evaluation for Gender Equalized and ESG Oriented Firms: An Internet Survey Experiment," Papers 2105.12292, arXiv.org.
    21. João V. Ferreira & Erik Schokkaert & Benoît Tarroux, 2023. "How group deliberation affects individual distributional preferences: An experimental study," Working Papers 2301, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    22. Santoro, Fabrizio & Mascagni, Giulia, 2023. "Visual nudges: How deterrence and equity shape tax attitudes and behaviour in Rwanda," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    23. Lennon, Conor & Teltser, Keith F. & Fernandez, Jose & Gohmann, Stephan, 2023. "How morality and efficiency shape public support for minimum wages," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 618-637.
    24. Arash Nekoei & David Seim, 2023. "How Do Inheritances Shape Wealth Inequality? Theory and Evidence from Sweden," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(1), pages 463-498.

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    More about this item

    Keywords

    Wealth tax; Optimal taxation; Tax preferences;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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