What’s fair? Preferences for tax progressivity in the wake of the financial crisis

Limberg, Julian

doi:10.1017/s0143814x18000430

Cited by 46 publications

(55 citation statements)

References 83 publications

(89 reference statements)

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“…The young have more polarized views and they tend to assign more probability to tail outcomes: they are both more pessimistic about the likelihood of being stuck in the bottom quintile and more optimistic about the likelihood of making it to the top quintile. 13 12 This is consistent with the idea in Piketty (1995) that a personal experience of mobility leads to an update of one's beliefs about the underlying social mobility mechanism. 13 Results using the qualitative measures of perceptions instead are generally consistent with these quantitative ones.…”

Section: B Heterogeneity In Perceptionssupporting

confidence: 85%

“…13 12 This is consistent with the idea in Piketty (1995) that a personal experience of mobility leads to an update of one's beliefs about the underlying social mobility mechanism. 13 Results using the qualitative measures of perceptions instead are generally consistent with these quantitative ones. The relation between college education (or income) and pessimism is significant, even after we control for other personal characteristics, including political affiliation (see online Appendix Table OA7).…”

Section: B Heterogeneity In Perceptionssupporting

confidence: 85%

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Intergenerational Mobility and Preferences for Redistribution

Alesina

Stantcheva

Teso

2018

American Economic Review

665

483

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Using new cross-country survey and experimental data, we investigate how beliefs about intergenerational mobility affect preferences for redistribution in France, Italy, Sweden, the United Kingdom, and the United States. Americans are more optimistic than Europeans about social mobility. Our randomized treatment shows pessimistic information about mobility and increases support for redistribution, mostly for “equality of opportunity” policies. We find strong political polarization. Left-wing respondents are more pessimistic about mobility: their preferences for redistribution are correlated with their mobility perceptions; and they support more redistribution after seeing pessimistic information. None of this is true for right-wing respondents, possibly because they see the government as a “problem” and not as the “solution.” (JEL D63, D72, H23, H24, J31, J62)

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Section: B Heterogeneity In Perceptionssupporting

confidence: 85%

Section: B Heterogeneity In Perceptionssupporting

confidence: 85%

Intergenerational Mobility and Preferences for Redistribution

Alesina

Stantcheva

Teso

2018

American Economic Review

665

483

View full text Add to dashboard Cite

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“…Moreover, ideology also shapes attitudes towards fiscal policies (e.g., Jacoby, 1994;Margalit, 2013). Beliefs provide people with information about how the economy works and allow them to assess policies based on principles such as fairness (Limberg, 2019). In general, left-wing citizens support government services and benefits and should be more likely to oppose expenditure-based consolidation than voters from the right.…”

Section: Heterogeneous Fiscal Policy Prioritiesmentioning

confidence: 99%

Do Citizens Care About Government Debt? Evidence from Survey Experiments on Budgetary Priorities

Bremer¹,

Bürgisser²

2020

Preprint

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In the wake of the European sovereign debt crisis, governments across the continent pursued fiscal consolidation. Existing research claims that fiscally conservative citizens support such fiscal policies. However, this literature largely ignores that fiscal consolidation carries substantial trade-offs. In hard times, governments have to cut spending or raise taxes to reduce government debt. We account for these trade-offs by using a split-sample and conjoint survey experiment conducted in four European countries. The results show that fiscal consolidation is not a priority for citizens: When forced to make a choice, support for reducing debt at the cost of lower spending or higher taxes is smaller than in an unconstrained setting. Revenue-based consolidations are especially unpopular, but expenditure-based consolidations are also contested. Moreover, the public has a clear priority order: People do not favor lower debt and taxes, but they support more progressive taxes to pay for higher government spending.

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“…What matters is that increases in debt came in the form of external effects induced by state actions. This procedural dimension fosters compensatory demands for tax progressivity (Limberg, 2019). Admittedly, there are more efficient, straightforward ways to compensate for bailouts than raising top PIT rates.…”

Section: Fairness Considerations For Restoring Equal Fiscal Treatmentmentioning

confidence: 99%

‘Tax the rich’? The financial crisis, fiscal fairness, and progressive income taxation

Limberg

2019

Eur. Pol. Sci. Rev.

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Has the financial crisis influenced taxes on the rich? In this article, I argue that crisis countries have raised income tax progressivity because of fiscal fairness considerations. I test this claim by analysing a new data set on top marginal personal income tax (PIT) rates for 122 countries from 2006 to 2014, applying matching methods and a difference-in-differences design. The results show that countries with a financial crisis have increased top PIT rates by 4 percentage points. Furthermore, rising public debt only leads to higher top PIT rates when it is crisis-induced. These findings demonstrate that notions of fiscal fairness can still shape progressive taxation in the 21st century.

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What’s fair? Preferences for tax progressivity in the wake of the financial crisis

Cited by 46 publications

References 83 publications

Intergenerational Mobility and Preferences for Redistribution

Intergenerational Mobility and Preferences for Redistribution

Do Citizens Care About Government Debt? Evidence from Survey Experiments on Budgetary Priorities

‘Tax the rich’? The financial crisis, fiscal fairness, and progressive income taxation

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