Quotation Sausgruber, Rupert, Tyran, Jean-Robert. 2014. Discriminatory taxes are unpopular - Even when they are efficient and distributionally fair. Journal of Economic Behavior and Organization 108, 463-476.


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Abstract

We explore the political acceptance of taxation in commodity markets. Participants in our experiment earn incomes by trading and must collectively choose one of the two tax regimes to raise a given tax revenue. A “uniform tax” (UT) imposes the same tax rate on all markets and is fair in that it yields the same – but low – income to participants in all markets. The “discriminatory tax” (DT) imposes a higher burden on markets with inelastic demand and is therefore efficient but it is also unfair in that incomes are unequal across markets. We find that DT is unpopular, as predicted. Surprisingly, however, DT remains unpopular when they are both efficient and produce a fair (equal) distribution. We conclude that non-discrimination (equal treatment) is a salient fairness principle in taxation that shapes voting on commodity taxes above and beyond concerns for efficiency and equal distribution.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Economic Behavior and Organization
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-A, VW-B, WH-A
Language English
Title Discriminatory taxes are unpopular - Even when they are efficient and distributionally fair
Volume 108
Year 2014
Page from 463
Page to 476
Reviewed? Y
URL http://www.sciencedirect.com/science/article/pii/S0167268114000055
DOI http://dx.doi.org/10.1016/j.jebo.2013.12.022

Associations

Projects
Experimental Investigations of Labor Markets
People
Sausgruber, Rupert (Details)
External
Tyran, Jean-Robert (University of Copenhagen, Denmark)
Organization
Institute for Public Sector Economics IN (Details)
Department of Economics DP (Details)
Research Institute for International Taxation FI (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5311 Public finance (Details)
5325 Political economics (Details)
5351 Public economy (Details)
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