Discriminatory Taxes are Unpopular Even when they are Efficient and Distributionally Fair
Publikation: Working paper › Forskning
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Discriminatory Taxes are Unpopular Even when they are Efficient and Distributionally Fair. / Sausgruber, Rupert ; Tyran, Jean-Robert Karl.
Kbh : Økonomisk institut, Københavns Universitet, 2013.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Discriminatory Taxes are Unpopular Even when they are Efficient and Distributionally Fair
AU - Sausgruber, Rupert
AU - Tyran, Jean-Robert Karl
N1 - JEL-Codes: C92, H21, D72
PY - 2013
Y1 - 2013
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 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 are unpopular, as predicted. Surprisingly, however, DT remain 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 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 are unpopular, as predicted. Surprisingly, however, DT remain 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
KW - Faculty of Social Sciences
KW - taxation
KW - behavioral public economics,
KW - voting
KW - efficiency
M3 - Working paper
T3 - University of Copenhagen. Institute of Economics. Discussion Papers (Online)
BT - Discriminatory Taxes are Unpopular Even when they are Efficient and Distributionally Fair
PB - Økonomisk institut, Københavns Universitet
CY - Kbh
ER -
ID: 86253257