French Favored Redistributions Derived From Surveys: A Political Assessment of Optimal Tax Theory

36 Pages Posted: 12 Dec 2018

Date Written: August 2, 2018

Abstract

An original method to find the shape of favored redistributions is presented, which is in turn used to assess the political acceptability of the optimal tax theory. Two surveys have been conducted in 2016 to quantify French preferences for income redistribution. In the first survey, respondents picked their preferred values for parameters which were used to determine the shapes of redistributions. These parameters included the proportion of winners and losers from a tax reform, and the minimum guaranteed income. Using different algorithms, several redistributions were derived from the interpolation of the median choices of each parameter (50% of winners, 10% of losers and a monthly demogrant of 800€). They resulted in transfers from high to low incomes of one tenth of the national disposable income. In the second survey, a majority of respondents agreed on implementing these redistributions. These results are in line with previous literature and robust to alternative specifications. Interestingly, the average desired redistribution corresponds closely to the shape of the optimal taxation derived from an utilitarian criterion. This allowed to show that this redistribution fails to obtain a significant majority support (contrarily to others), despite its good reception in a setting inhibiting self-interest. Finally, this study provides evidence that French citizens support a more direct democratic procedure to define the income tax rates, and describes a way to do so.

Keywords: Preferences for Redistribution, Desired Tax, Income Tax Rates, Income Distribution, France

JEL Classification: D31, D63, H21, P16

Suggested Citation

Fabre, Adrien, French Favored Redistributions Derived From Surveys: A Political Assessment of Optimal Tax Theory (August 2, 2018). Available at SSRN: https://ssrn.com/abstract=3292505 or http://dx.doi.org/10.2139/ssrn.3292505

Adrien Fabre (Contact Author)

Paris School of Economics ( email )

Paris
France

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