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The value of progressivity: Evidence from survey experiments

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  • Benoît Tarroux

    (Université de Rennes 1, CREM UMR CNRS 6211, France)

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.

Suggested Citation

  • Benoît Tarroux, 2017. "The value of progressivity: Evidence from survey experiments," Economics Working Paper Archive (University of Rennes & University of Caen) 2017-13, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:2017-13
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    More about this item

    Keywords

    Tax progressivity; Optimal taxation; Survey experiment;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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