30 Pages Posted: 7 Apr 2004
Date Written: July 16, 2004
Research has shown that people vary widely in their support or opposition to progressive taxation. We argue here that the perception of progressiveness itself is affected by the nature of the tax system and by the way it is framed, or presented. Experiments conducted over the World-Wide Web and using within-subject design demonstrate that subjects suffer from a range of heuristics and biases in understanding and supporting progressive or redistributive taxation. After reviewing some prior results, we report four new studies. Two of them indicate that people do not sufficiently appreciate the reduction of progressiveness that results from the use of tax deductions to partly reimburse private expenditures. The other two indicate that people do not fully appreciate the reduction in progressiveness that results from cuts in government services.
Suggested Citation: Suggested Citation
Baron, Jonathan and McCaffery, Edward J., Masking Redistribution (or its Absence) (July 16, 2004). U of Penn, Inst for Law & Econ Research Paper 04-09; USC Law School, Olin Research Paper No. 04-5; and USC CLEO Research Paper No. C04-1. Available at SSRN: https://ssrn.com/abstract=528165 or http://dx.doi.org/10.2139/ssrn.528165