Redistributive politics with target-specific beliefs

Arbeitspapier

Forty-two percent of Americans give different answers when asked, respectively, about the reasons for being rich and the reasons for being poor. We develop and test a theo-ry about support for redistribution in the presence of target-specific beliefs about the causes of low and high incomes. Our theory predicts that target-specific beliefs about the poor matter most for preferences about transfers to the poor, and target-specific beliefs about the rich matter most for preferences about taxation of the rich. Survey evidence from the United States and Germany and experimental evidence on giving money to real welfare recipients supports our theory. We also find, in theory, the ex-istence of a moral release equilibrium in which the rich choose high taxes on lower income classes to discourage effort and create an unworthy poor class, thereby escap-ing moral pressure to support the poor.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ifo Working Paper ; No. 297

Classification and Topics

• Classification: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
• Subject: redistribution ; fairness ; taxation ; political economy ; moral release equilibrium ; target-specific beliefs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fong, Christina ; Poutvaara, Panu
• Event: Veröffentlichung
• (who): ifo Institute - Leibniz Institute for Economic Research at the University of Munich
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/199071