Class Altruism and Redistribution

Abstract Why do tax rates vary so much across countries? We study the role of other-regarding preferences and ethnic fragmentation in redistribution. A government is elected by altruistic voters chooses a redistributive income tax. Altruism directed towards social identity groups. Three main factors yield low levels redistribution: (i) strong in-group altruism among rich voters—referred to as class altruism; (ii) weak universal altruism—in particular rich; (iii) poor voters. document survey evidence that pattern United States European Union consistent with observed differences taxes.