Discriminatory Taxes are Unpopular - Even when they are Efficient and Distributionally Fair

Autor(en)
Rupert Sausgruber, Jean-Robert Tyran
Abstrakt

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.

Organisation(en)
Institut für Volkswirtschaftslehre, Wiener Zentrum für Experimentelle Wirtschaftsforschung
Externe Organisation(en)
Wirtschaftsuniversität Wien (WU)
Anzahl der Seiten
32
Publikationsdatum
11-2013
ÖFOS 2012
502047 Volkswirtschaftstheorie
Link zum Portal
https://ucris.univie.ac.at/portal/de/publications/discriminatory-taxes-are-unpopular--even-when-they-are-efficient-and-distributionally-fair(1b502b36-62de-4c92-a959-4a9c8cca9e26).html