Discriminatory taxes are unpopular - Even when they are efficient and distributionally fair

Rupert Sausgruber, Jean-Robert Tyran

Publikation: Wissenschaftliche FachzeitschriftOriginalbeitrag in FachzeitschriftBegutachtung

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Abstract

We explore the political acceptance of taxation in commodity markets. Participants in our experiment earn incomes by trading and must collectively choose one of the 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 is unpopular, as predicted. Surprisingly, however, DT remains 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.
OriginalspracheEnglisch
Seiten (von - bis)463 - 476
FachzeitschriftJournal of Economic Behavior and Organization
Jahrgang108
DOIs
PublikationsstatusVeröffentlicht - 2014

Österreichische Systematik der Wissenschaftszweige (ÖFOS)

  • 502027 Politische Ökonomie
  • 502024 Öffentliche Wirtschaft
  • 502010 Finanzwissenschaft

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