Inequality, Information, and European Tax Policy Preferences

• In Event: Inequality

Abstract

Inequality has increased over recent decades in many advanced industrial democracies, but taxes have seldom become substantially more progressive in response. One possible explanation for the lack of a policy response is that voters have muted preferences for taxing high incomes and wealth despite high inequality. Using original representative surveys in Austria, Germany, and the United Kingdom, this paper employs two strategies for measuring the progressivity of tax policy preferences. Voters, we find, express an abstract preference for progressivity but concretely support tax plans only slightly more progressive than the status quo. We implement survey experiments to explore one commonly advanced explanation for muted demand for higher tax progressivity: ignorance about the actual extent of aggregate inequality or about one’s own place in the income distribution. We find little evidence that, in either Austria or Germany, informing subjects about aggregate inequality or their place in the income distribution has a significant effect on average support for progressive taxation. While it seems likely that muted preferences for redistribution help explain why countries have not reacted to rising inequality with more progressive tax policies, low information does little on the whole to explain those preferences.

Authors

• Cameron Ballard-Rosa, University of North Carolina, Chapel Hill

• Ronald L. Rogowski, University of California, Los Angeles

• Kenneth F. Scheve, Yale University

• Nicolaj Thor, Harvard University