Why Do the Rich Oppose Redistribution? An Experiment with America’s Top 5%

51 Pages Posted: 12 Jun 2019 Last revised: 26 Jun 2019

See all articles by Alain Cohn

Alain Cohn

University of Michigan

Lasse J. Jessen

University of Kiel - Faculty of Economics and Social Sciences

Marko Klasnja

New York University

Paul Smeets

Maastricht University

Date Written: May 28, 2019

Abstract

Wealthy individuals have a disproportionate influence on politics and firms. We study attitudes toward redistribution of a large sample of the top 5% in the U.S. in terms of income and financial assets, and find that they prefer less redistribution than a representative sample of the bottom 95%. The differences in tax attitudes and political views can be largely attributed to differences in distributional preferences, which we measured in an experiment where choices affected the pay of pairs of workers in a real-effort task. Wealthy Americans redistribute less to the low-income worker, thus accepting more inequality than the rest of the population. The gap in distributional preferences is primarily driven by individuals who acquired wealth over their lifetime rather than those who were born into wealth. Our findings raise the possibility that wealthy individuals contribute to the persistent income inequality in the U.S.

Keywords: redistribution, social preferences, experimental economics, inequality

Suggested Citation

Cohn, Alain and Jessen, Lasse J. and Klasnja, Marko and Smeets, Paul, Why Do the Rich Oppose Redistribution? An Experiment with America’s Top 5% (May 28, 2019). Available at SSRN: https://ssrn.com/abstract=3395213 or http://dx.doi.org/10.2139/ssrn.3395213

Alain Cohn

University of Michigan ( email )

105 S State St
Ann Arbor, MI 48109
United States

Lasse J. Jessen

University of Kiel - Faculty of Economics and Social Sciences ( email )

Kiel
Germany

Marko Klasnja

New York University ( email )

715 Broadway
New York, NY 10003
United States

HOME PAGE: http://https://files.nyu.edu/mk3296/public/index.html

Paul Smeets (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands
+31433883643 (Phone)

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