Bertil Tungodden, NHH, Bergen – University of Copenhagen

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Bertil Tungodden, NHH, Bergen

Beliefs about Behavioral Responses to Taxation


We conduct an experiment to study how beliefs about behavioral responses to taxation
and preferences over equality–eiciency trade-os relate to the political disagreement
on redistribution. We use a novel method to elicit incentivized beliefs from a sample of
14,700 Americans about how taxes aect people’s eort choices, and we elicit incentivized
equality–eiciency preferences. We find that Democrats and Republicans have virtually
identical beliefs about behavioral responses to taxation. Furthermore, we find that beliefs
about behavioral responses to taxation fail to predict people’s support for redistribution
of income in society. Equality–eiciency preferences, by contrast, strongly predict both
people’s political ailiation and their support for redistribution of income in society. We
also explore the role of motivated beliefs and identity politics by priming respondents
about the political disagreement on redistribution. The treatments increase political
polarization in preferences and policy views, but do not cause political polarization in
beliefs. Overall, our findings suggest that the political divide on redistribution relates
more to people’s preferences than to their beliefs about the behavioral responses to
taxation.

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Bertil Tungodden is a Professor at the Department of Economics at the Norwegian School of Economics. He is also an Associated Senior Researcher at Chr. Michelsen Institute. His research interests include experimental and behavioral economics, development economics, inequality and poverty and social choice theory.