Quantifying Preferences for Redistribution

This paper constructs quantified measures of preferences for redistribution using survey data from seven OECD countries in which respondents were asked how much in taxes individuals earning given levels of income “should” pay. The resulting preferred tax rates generate reasonable budget sets, are consistent with observed tax rates, and correlate closely with conventional categorical preference measures and voting behavior. While the overall variation in preferred progressivity is substantial, differences in preferences across political and economic subgroups are modest. Individuals do not appear to prefer disproportionately lower tax rates at income levels close to their own. Actual tax schedules imply a larger size of government than preferred tax schedules but often do tend to reflect preferred progressivity. * Monica Singhal. John F. Kennedy School of Government, Harvard University and NBER. [email protected]. I thank Octavia Foarta and Jill Gentry Leandro for providing excellent research assistance and the Harvard University Weatherhead Center for International Affairs and the Taubman Center for State and Local Government for generous research support.