Inequality and Support for Taxing the Rich in Times of Crisis

• In Event: Welfare State Support in Times of Crisis

Abstract

Compensatory political economy theories argue that crises, such as mass wars, enhance support for taxing the rich because they entail unequal sacrifices that can be mobilized politically. We examine whether this mechanism helps to explain public responses to the COVID-19 pandemic, which is characterized by a markedly uneven distribution of deaths and economic hardship. Drawing on pre-registered survey experiments conducted in 14 countries during the second wave of the pandemic in December 2020, we test whether the salience of the pandemic and information about its unequal impact increase average support for higher taxes on the rich. In a non-parametric analysis of effect heterogeneity, we explore whether the pandemic reinforces or dampens existing socio-economic cleavages concerning tax progressivity. Our findings not only shed light on the political consequences of the pandemic, but also contribute experimental evidence on the micro-foundations of preferences for tax progressivity and redistribution.

Author

• Daniel Stegmueller, Duke University