Hostname: page-component-78c5997874-dh8gc Total loading time: 0 Render date: 2024-11-19T12:22:06.297Z Has data issue: false hasContentIssue false
  • English
  • Français

Income Perception, Information, and Progressive Taxation: Evidence from a Survey Experiment*

Published online by Cambridge University Press:  18 December 2015

José Fernández-Albertos  and
Alexander Kuo
Get access Rights & Permissions [Opens in a new window]

Abstract

Are individuals accurately informed about their place in the income distribution? Despite the importance of accurate information about one’s placement in the income distribution for many models of redistribution, this assumption remains untested. We present survey data and an embedded experiment where we inform some individuals their true place in the income distribution. We then assess the impact of such information on tax progressivity preferences. We find that individuals have considerable error regarding their self-placement in the income distribution. Revealing to individuals their true placement affects progressivity preferences for individuals who learn they are poor, and for individuals whose prior is that they are poor. These results have implications for information assumptions of redistribution models of comparative political economy and contribute to our understanding of tax preferences, an understudied dimension of redistribution preferences.

Type
Original Articles
Information
Political Science Research and Methods , Volume 6 , Supplement 1 , January 2018 , pp. 83 - 110
Copyright
© The European Political Science Association 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

José Fernández-Albertos is Permanent Research Fellow (Científico Titular) at the Institute for Policies and Public Goods (IPP) of the Spanish National Research Council (CSIC), Calle Albasanz, 26–28 Madrid 28037, Spain. Alexander Kuo, Assistant Professor, Department of Government, Cornell University, 214 White Hall, Ithaca, NY 14850 ([email protected]). Previous versions of the paper were presented at the Annual Meetings of the Midwest Political Science Association, European Political Science Association, Council for European Studies, and American Political Science Association. The authors thank Aina Gallego, Jona Linde, Karen Long Jusko, Peter John Loewen, John Sides, three anonymous reviewers, and the editor, for very helpful comments on this paper. Fernández-Albertos acknowledges financial support from the Spanish Ministry for the Economy and Competitiveness, project reference no. CSO2013-48451-R. The authors also thank Modesto Escobar Mercado and the University of Salamanca for fielding the additional survey and providing supplemental data. This latter survey was made possible by financial support from the 2008–2011 National Program Plan for Scientific Research, Development and Technological Innovation (I+ D+I) of the Spanish Ministry for the Economy and Competitiveness (project reference no. CSO2011-27005). To view supplementary material for this article, please visit http://dx.doi.org/10.1017/psrm.2015.73

References

Alesina, Alberto, and Angeletos, George-Marios. 2005. ‘Fairness and Redistribution: US’. The American Economic Review 95(4):960–980.Google Scholar
Alesina, Alberto, and La Ferrara, Eliana. 2005. ‘Preferences for Redistribution in the Land of Opportunities’. Journal of Public Economics 89(1):897–931.CrossRefGoogle Scholar
Bartels, Larry M. 2005. ‘Homer Gets a Tax Cut: Inequality and Public Policy in the American Mind’. Perspectives on Politics 3(1):15–31.CrossRefGoogle Scholar
Bénabou, Roland, and Ok, Efe A. 2001. ‘Social Mobility and the Demand for Redistribution: The POUM Hypothesis’. Quarterly Journal of Economics 116(2):447–487.Google Scholar
Bénabou, Roland, and Tirole, Jean. 2006. ‘Belief in a Just World and Redistributive Politics’. Quarterly Journal of Economics 121(2):699–746.Google Scholar
Beramendi, Pablo, and Rehm, Philipp. forthcoming. ‘Who Gives, Who Gains? Progressivity and Preferences’. Comparative Political Studies.Google Scholar
Boudreau, Cheryl, and Arthur, Lupia. 2011. ‘Political Knowledge’. In James N. Druckman, Donald P. Green, James H. Kulkinski, and Arthur Lupia (eds), Cambridge Handbook of Experimental Political Science, 171–183.Google Scholar
Chetty, Raj, and Saez, Emmanuel. 2013. ‘Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients’. American Economic Journal: Applied Economics 5(1):1–31.Google Scholar
Costa-Font, Joan, and Gil, Joan. 2009. ‘Exploring the pathways of inequality in health, health care access and financing in decentralized Spain’. Journal of European Social Policy 19(5):446–458.CrossRefGoogle Scholar
Cruces, Guillermo, Truglia, Ricardo Pérez, and Tetaz, Martin. 2013. ‘Biased Perceptions of Income Distribution and Preferences for Redistribution: Evidence from a Survey Experiment’. Journal of Public Economics 98:100–112.CrossRefGoogle Scholar
De Donder, Philippe, and Hindriks, Jean. 2003. ‘The Politics of Progressive Income Taxation with Incentive Effects’. Journal of Public Economics 87(11):2491–2505.Google Scholar
Delli Carpini, Michael X., and Keeter, Scott. 1996. What Americans Know About Politics and Why it Matters. New Haven: Yale University Press.Google Scholar
DiPrete, Thomas A. 2007. ‘Is This a Great Country? Upward Mobility and the Chance for Riches in Contemporary America’. Research in Social Stratification and Mobility 25(1):89–95.Google Scholar
Duflo, Esther, and Saez, Emmanuel. 2003. ‘The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment’. The Quarterly Journal of Economics 118(3):815–842.CrossRefGoogle Scholar
Fehr, Ernst, and Schmidt, Klaus M.. 1999. ‘A Theory of Fairness, Competition, and Cooperation’. Quarterly Journal of Economics 114(3):817–868.CrossRefGoogle Scholar
Fernández-Albertos, José, and Manzano, Dulce. 2012. ‘The Lack of Partisan Conflict Over the Welfare State in Spain’. South European Society and Politics 17(3):427–447.Google Scholar
Gallego, Aina. 2013. ‘Attitudinal Effects of Income Inequality: Cross-National and Experimental Evidence’. Paper Presented at the ECPR Joint Sessions Mainz, Germany, 11–13 March.Google Scholar
Gingrich, Jane, and Ansell, Ben. 2012. ‘Preferences in Context Micro Preferences, Macro Contexts, and the Demand for Social Policy’. Comparative Political Studies 45(12):1624–1654.Google Scholar
Heinemann, Friedrich, and Hennighausen, Tanja. 2010. ‘Don’t Tax Me? Determinants of Individual Attitudes Toward Progressive Taxation’. Discussion Paper No. 10-017, ZEW-Centre for European Economic Research, Mannheim, Germany.Google Scholar
Hindriks, Jean. 2001. ‘Is There a Demand for Income Tax Progressivity?’. Economics Letters 73(1):43–50.Google Scholar
Hurd, Michael D. 2009. ‘Subjective Probabilities in Household Surveys’. Annual Review of Economics 1:543.Google Scholar
Iversen, Toroben, and Soskice, David. 2001. ‘An Asset Theory of Social Policy Preferences’. American Political Science Review 95(4):875–894.Google Scholar
Iyengar, Shanto, and Kinder, Donald R.. 1987. News that Matters: Agenda-Setting and Priming in a Television Age. Chicago: The University of Chicago Press.Google Scholar
Kakwani, Nanak C. 1977. ‘Measurement of Tax Progressivity: An International Comparison’. The Economic Journal 87(345):71–80.Google Scholar
Klor, Esteban F. 2003. ‘On the Popular Support for Progressive Taxation’. Journal of Public Economic Theory 5(4):593–604.Google Scholar
Kuchler, Fred, and Variyam, Jayachandran. 2003. ‘Mistakes Were Made: Misperception as a Barrier to Reducing Overweight’. International Journal of Obesity 27(7):856–861.Google Scholar
Kuklinski, James H., Quirk, Paul J., Jerit, Jennifer, Schwieder, David, and Rich, Robert F.. 2000. ‘Misinformation and the Currency of Democratic Citizenship’. Journal of Politics 62(3):790–816.Google Scholar
Kuziemko, Ilyana, Norton, Michael I., Saez, Emmanuel, and Stantcheva, Stefanie. 2013. How Elastic are Preferences for Redistribution? Evidence from Randomized Survey Experiments. Cambridge, MA: National Bureau of Economic Research.Google Scholar
Lenz, Gabriel S. 2009. ‘Learning and Opinion Change, Not Priming: Reconsidering the Priming Hypothesis’. American Journal of Political Science 53(4):821–837.Google Scholar
Lü, Xiaobo, and Scheve, Kenneth. 2014. Inequity Aversion and the Mass Politics of Taxing the Rich in France and the United States. Unpublished manuscript.Google Scholar
Luskin, Robert C., and Bullock, John G.. 2011. ‘“Don’t Know” Means “Don’t Know”: DK Responses and the Public’s Level of Political Knowledge’. The Journal of Politics 73(2):547–557.CrossRefGoogle Scholar
Manski, Charles F. 2004. ‘Measuring Expectations’. Econometrica 72(5):1329–1376.CrossRefGoogle Scholar
Margalit, Yotam. 2013. ‘Explaining Social Policy Preferences: Evidence from the Great Recession’. American Political Science Review 107(1):80–103.Google Scholar
Marhuenda, Francisco, and Ortuño-Ortín, Ignacio. 1995. ‘Popular Support for Progressive Taxation’. Economics Letters 48(3):319–324.Google Scholar
Maximova, Katerina, McGrath, John J., Barnett, Tracie, O’Loughlin, Jennifer, Paradis, Gilles, and Lambert, Martin. 2008. ‘Do You See What I See? Weight Status Misperception and Exposure to Obesity Among Children and Adolescents’. International Journal of Obesity 32(6):1008–1015.Google Scholar
McCall, Leslie. 2013. The Undeserving Rich: American Beliefs About Inequality, Opportunity, and Redistribution. New York: Cambridge University Press.CrossRefGoogle Scholar
McCall, Leslie, and Chin, Fiona. 2013. ‘Does Knowledge of Inequality Affect Beliefs About Inequality?’ Paper presented at the Midwest Political Science Association, Chicago, IL, 11–14 April.Google Scholar
McCall, Leslie, and Kenworthy, Lane. 2009. ‘Americans’ Social Policy Preferences in the Era of Rising Inequality’. Perspectives on Politics 7(3):459–484.Google Scholar
Meltzer, Allan H., and Richard, Scott F.. 1981. ‘A Rational Theory of the Size of Government’. The Journal of Political Economy 89(5):914–927.Google Scholar
Michelbach, Philip A., Scott, John T., Matland, Richard E., and Bornstein, Brian H.. 2003. ‘Doing Rawls Justice: An Experimental Study of Income Distribution Norms’. American Journal of Political Science 47(3):523–539.Google Scholar
Miller, Joanne M., and Krosnick, Jon A.. 2000. ‘News Media Impact on the Ingredients of Presidential Evaluations: Politically Knowledgeable Citizens are Guided by a Trusted Source’. American Journal of Political Science 44(2):301–315.Google Scholar
Neckerman, Kathryn M., and Torche, Florencia. 2007. ‘Inequality: Causes and Consequences’. Annual Review of Sociology 33:335–357.Google Scholar
Neuman, W. Russell. 1992. Common Knowledge: News and the Construction of Political Meaning, Chicago: University of Chicago Press.CrossRefGoogle Scholar
Norton, Michael I., and Ariely, Dan. 2011. ‘Building a Better America—One Wealth Quintile at a Time’. Perspectives on Psychological Science 6(1):9–12.Google Scholar
Osberg, Lars, and Smeeding, Timothy. 2006. ‘“Fair” Inequality? Attitudes Toward Pay Differentials: The United States in Comparative Perspective’. American Sociological Review 71(3):450–473.Google Scholar
Page, Benjamin I., and Shapiro, Robert Y.. 2010. The Rational Public: Fifty Years of Trends in Americans’ Policy Preferences, Chicago: University of Chicago Press.Google Scholar
Piketty, Thomas. 2014. Capital in the Twenty-First Century, Cambridge: Belknap Press.Google Scholar
Prasad, Monica, and Deng, Yingying. 2009. ‘Taxation and the Worlds of Welfare’. Socio-Economic Review 7(3):431–457.Google Scholar
Prior, Markus, and Lupia, Arthur. 2008. ‘Money, Time, and Political Knowledge: Distinguishing Quick Recall and Political Learning Skills’. American Journal of Political Science 52(1):169–183.CrossRefGoogle Scholar
Rehm, Philipp. 2009. ‘Risks and Redistribution: An Individual-Level Analysis’. Comparative Political Studies 42(7):855–881.Google Scholar
Rehm, Philipp. 2011. ‘Social Policy by Popular Demand’. World Politics 63(2):271–299.Google Scholar
Rehm, Philipp, Hacker, Jacob S., and Schlesinger, Mark. 2012. ‘Insecure Alliances: Risk, Inequality, and Support for the Welfare State’. American Political Science Review 106(2):386–406.Google Scholar
Reimers, Stian. 2009. ‘A Paycheck Half-Empty or Half-Full? Framing, Fairness and Progressive Taxation’. Judgment and Decision Making 4(6):461–466.Google Scholar
Roberts, Michael L., Hite, Peggy A., and Bradley, Cassie F.. 1994. ‘Understanding Attitudes Toward Progressive Taxation’. Public Opinion Quarterly 58(2):165–190.CrossRefGoogle Scholar
Roemer, John E. 1999. ‘The Democratic Political Economy of Progressive Income Taxation’. Econometrica 67(1):1–19.CrossRefGoogle Scholar
Romer, Thomas. 1975. ‘Individual Welfare, Majority Voting, and the Properties of a Linear Income Tax’. Journal of Public Economics 4(2):163–185.CrossRefGoogle Scholar
Rueda, David. 2005. ‘Insider–Outsider Politics in Industrialized Democracies: The Challenge to Social Democratic Parties’. American Political Science Review 99(1):61–74.Google Scholar
Scheve, Kenneth, and Stasavage, David. 2010. ‘The Conscription of Wealth: Mass Warfare and the Demand for Progressive Taxation’. International Organization 64(4):529–562.Google Scholar
Scott, John T., Matland, Richard E., Michelbach, Philip A., and Bornstein, Brian H.. 2001. ‘Just Deserts: An Experimental Study of Distributive Justice Norms’. American Journal of Political Science 45(4):749–767.Google Scholar
Sides, John. 2011. ‘Stories, Science, and Public Opinion About the Estate Tax’. Available at http://home.gwu.edu/~jsides/estatetax.pdf, accessed 4 April 2013.Google Scholar
Slemrod, Joel. 2006. ‘The Role of Misconceptions in Support for Regressive Tax Reform’. National Tax Journal 59(1):57–75.CrossRefGoogle Scholar
Snyder, James M., and Kramer, Gerald H.. 1988. ‘Fairness, Self-interest, and the Politics of the Progressive Income Tax’. Journal of Public Economics 36(2):197–230.Google Scholar
Stroup, Michael D. 2005. ‘An Index for Measuring Tax Progressivity’. Economics Letters 86(2):205–213.CrossRefGoogle Scholar
Truesdale, Kimberly P., and Stevens, June. 2008. ‘Do the Obese Know They are Obese?’. North Carolina Medical Journal 69(3):188–194.Google Scholar
Urban, Ivica. 2009. ‘Kakwani Decomposition of Redistributive Effect: Origins, Critics and Upgrades’. working paper number is ECINEQ WP 2009–148.Google Scholar
Van der Brug, Wouter, Semetko, Holli A., and Valkenburg, Patti M.. 2007. ‘Media Priming in a Multi-Party Context: A Controlled Naturalistic Study in Political Communication’. Political Behavior 29(1):115–141.CrossRefGoogle Scholar
Supplementary material: File

Fernández-Albertos and Kuo supplementary material

Fernández-Albertos and Kuo supplementary material 1

Download Fernández-Albertos and Kuo supplementary material(File)
File 298.5 KB
Supplementary material: PDF

Fernández-Albertos and Kuo supplementary material

Fernández-Albertos and Kuo supplementary material 2

Download Fernández-Albertos and Kuo supplementary material(PDF)
PDF 355 KB