Tax Salience, Voting, and Deliberation

31 Pages Posted: 3 Nov 2008 Last revised: 9 Nov 2008

See all articles by Rupert Sausgruber

Rupert Sausgruber

Vienna University of Economics and Business - Department of Economics

Jean-Robert Tyran

University of Vienna; University of Copenhagen - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: October 31, 2008

Abstract

Tax incentives can be more or less salient, i.e. noticeable or cognitively easy to process. Our hypothesis is that taxes on consumers are more salient to consumers than equivalent taxes on sellers because consumers underestimate the extent of tax shifting in the market. We show that tax salience biases consumers' voting on tax regimes, and that experience is an effective de-biasing mechanism in the experimental laboratory. Pre-vote deliberation makes initially held opinions more extreme rather than correct and does not eliminate the bias in the typical committee. Yet, if voters can discuss their experience with the tax regimes they are less likely to be biased.

Keywords: tax salience, learning, deliberation, voting

JEL Classification: C92, H22, D72

Suggested Citation

Sausgruber, Rupert and Tyran, Jean-Robert, Tax Salience, Voting, and Deliberation (October 31, 2008). Univ. of Copenhagen Dept. of Economics Discussion Paper No. 08-21. Available at SSRN: https://ssrn.com/abstract=1292731 or http://dx.doi.org/10.2139/ssrn.1292731

Rupert Sausgruber (Contact Author)

Vienna University of Economics and Business - Department of Economics ( email )

Welthandelsplatz 1
Vienna, 1020
Austria
+43 1 31336 4572 (Phone)

Jean-Robert Tyran

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, Vienna 1090
Austria

HOME PAGE: http://homepage.univie.ac.at/jean-robert.tyran/

University of Copenhagen - Department of Economics ( email )

Ă˜ster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+45 353 23 027 (Phone)

HOME PAGE: http://www.econ.ku.dk/tyran/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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