Do Americans Want to Tax Capital? Evidence from Online Surveys

51 Pages Posted: 9 Oct 2017

See all articles by Raymond J. Fisman

Raymond J. Fisman

National Bureau of Economic Research (NBER); Boston University

Keith Gladstone

Princeton University

Ilyana Kuziemko

National Bureau of Economic Research (NBER)

Suresh Naidu

Columbia University

Date Written: October 2017

Abstract

A vast theoretical literature in public finance has studied the question of the desirability of capital taxation. Distinct from questions of the optimality of taxing wealth is whether it is politically feasible. We provide, to our knowledge, the first investigation of individuals' preferences over jointly taxing income and wealth, via a survey on Amazon's Mechanical Turk. We provide subjects with a set of hypothetical individuals' incomes and wealth and elicit subjects' preferred (absolute) tax bill for these individuals. Our method allows us to unobtrusively map both income earned and accumulated wealth into desired tax levels. Our regression results yield roughly linear desired tax rates on income of about 14 percent. Respondents' suggested tax rates indicate positive desired wealth taxation. When we distinguish between sources of wealth we find that, in line with recent theoretical arguments, subjects' implied tax rate on wealth is three percent when the source of wealth is inheritance, far higher than the 0.8 percent rate when wealth is from savings. We show these tax rates are consistent with reasonable parameterizations of recent theoretical optimal wealth tax formulae.

Suggested Citation

Fisman, Raymond and Gladstone, Keith and Kuziemko, Ilyana and Naidu, Suresh, Do Americans Want to Tax Capital? Evidence from Online Surveys (October 2017). NBER Working Paper No. w23907. Available at SSRN: https://ssrn.com/abstract=3049731

Raymond Fisman (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
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Boston University ( email )

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Boston, MA 02215
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Keith Gladstone

Princeton University

22 Chambers Street
Princeton, NJ 08544-0708
United States

Ilyana Kuziemko

National Bureau of Economic Research (NBER) ( email )

Suresh Naidu

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

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