Why Do (Some) Ordinary Americans Support Tax Cuts for the Rich? Evidence From a Randomized Survey
About this Session
Fri. 08.04. 10:00
Speaker: Nina Weber, Co-Authors: David Hope, Julian Limberg
Why do (some) ordinary citizens support tax cuts for the rich? A prominent explanation in the political economy literature stresses the role of unenlightened self-interest. According to this view, citizens are ignorant about the tax system and consistently fail to gauge whether they are directly affected by tax reforms. We use a randomized, online information provision experiment, embedded in a representative survey of around 3,000 Americans to identify the drivers of preferences for cutting taxes on the rich. The results show that informing individuals of whether they are directly affected by a cut in the top federal income tax rate has no impact on preferences. We therefore find no support for the unenlightened self-interest explanation. In contrast, we find preferences for taxing the rich are fundamentally affected by information that shifts citizens’ core fairness beliefs, as well as information on the past trajectory of top tax rates. Our results therefore align with explanations of tax policy preferences that emphasize the importance of fairness perceptions and reference points.