Discriminatory taxes are unpopular—Even when they are efficient and distributionally fair
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Discriminatory taxes are unpopular—Even when they are efficient and distributionally fair. / Sausgruber, Rupert; Tyran, Jean-Robert Karl.
I: Journal of Economic Behavior & Organization, Bind 108, 2014, s. 463–476.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Discriminatory taxes are unpopular—Even when they are efficient and distributionally fair
AU - Sausgruber, Rupert
AU - Tyran, Jean-Robert Karl
N1 - JEL classification: C92, H21, D72
PY - 2014
Y1 - 2014
N2 - We explore the political acceptance of taxation in commodity markets. Participants in our experiment earn incomes by trading and must collectively choose one of the two tax regimes to raise a given tax revenue. A “uniform tax” (UT) imposes the same tax rate on all markets and is fair in that it yields the same – but low – income to participants in all markets. The “discriminatory tax” (DT) imposes a higher burden on markets with inelastic demand and is therefore efficient but it is also unfair in that incomes are unequal across markets. We find that DT is unpopular, as predicted. Surprisingly, however, DT remains unpopular when they are both efficient and produce a fair (equal) distribution. We conclude that non-discrimination (equal treatment) is a salient fairness principle in taxation that shapes voting on commodity taxes above and beyond concerns for efficiency and equal distribution.
AB - We explore the political acceptance of taxation in commodity markets. Participants in our experiment earn incomes by trading and must collectively choose one of the two tax regimes to raise a given tax revenue. A “uniform tax” (UT) imposes the same tax rate on all markets and is fair in that it yields the same – but low – income to participants in all markets. The “discriminatory tax” (DT) imposes a higher burden on markets with inelastic demand and is therefore efficient but it is also unfair in that incomes are unequal across markets. We find that DT is unpopular, as predicted. Surprisingly, however, DT remains unpopular when they are both efficient and produce a fair (equal) distribution. We conclude that non-discrimination (equal treatment) is a salient fairness principle in taxation that shapes voting on commodity taxes above and beyond concerns for efficiency and equal distribution.
U2 - 10.1016/j.jebo.2013.12.022
DO - 10.1016/j.jebo.2013.12.022
M3 - Journal article
VL - 108
SP - 463
EP - 476
JO - Journal of Economic Behavior & Organization
JF - Journal of Economic Behavior & Organization
SN - 0167-2681
ER -
ID: 128681009