Why Do (Some) Ordinary Americans Support Tax Cuts for the Rich? Evidence From a Randomized Survey Experiment

Abstract

Why do (some) ordinary citizens support tax cuts for the rich? A prominent explanation in the political economy literature stresses the role of unenlightened self-interest. According to this view, citizens consistently fail to gauge whether they are directly affected by tax policy reforms. We use a randomized survey experiment in the US to identify the drivers of preferences for cutting taxes on the rich. The results show that informing individuals of whether they are directly affected by a cut in the top federal income tax rate has no impact on preferences.We therefore find no support for the unenlightened self-interest explanation. In contrast, we find preferences for taxing the rich are fundamentally affected by information that shifts citizens' core fairness beliefs, as well as information on the past trajectory of top tax rates. Our results therefore align with explanations of tax policy preferences that emphasize the importance of fairness perceptions and reference points.

In-Group Bias in Preferences for Redistribution: A Survey Experiment in Italy

“…unemployed). Another explanation is that increasing inequality is seen as a positive signal of the trickle down economics(Ekins, 2019;Hope, Limberg and Weber, 2021;Stantcheva, 2021): if rich people become richer, they are more likely to create jobs, and taxing them is perceived as a negative incentive for their economic investments and for the whole economy.…”

A multidisciplinary analysis of tax reform

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