The Altruistic Rich? Inequality and Other-Regarding Preferences for Redistribution

Abstract

What determines support among individuals for redistributive policies? Do individuals care about others when they assess the consequences of redistribution? Using data for the US from 1978 to 2010, we find that differences in redistribution preferences between the rich and the poor are high in some states and low in others. Surprisingly, this difference has a lot to do with the rich and very little to do with the poor. While support for redistribution decreases with income, the preferences of the rich are very sensitive to the level of macro-inequality, and the rich are more supportive of redistribution in unequal states than they are in more equal states. To explain this relationship, we propose a model of other-regarding preferences for redistribution, which we term "income-dependent altruism." In making these distinctions between the poor and the rich, the arguments in this paper challenge some influential approaches to the politics of inequality.