Discriminatory Taxes are Unpopular
- Author(s)
- Rupert Sausgruber, Jean-Robert Tyran
- 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
- Organisation(s)
- Department of Economics, Vienna Center for Experimental Economics
- External organisation(s)
- Wirtschaftsuniversität Wien (WU)
- Journal
- Journal of Economic Behavior & Organization
- Volume
- 108
- Pages
- 463-476
- No. of pages
- 14
- ISSN
- 0167-2681
- DOI
- https://doi.org/10.1016/j.jebo.2013.12.022
- Publication date
- 2014
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502045 Behavioural economics, 502024 Public economy, 502038 Taxation
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics, Organizational Behavior and Human Resource Management
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/discriminatory-taxes-are-unpopular(a5e19e6e-d268-4f60-b82d-70ac83749a56).html