16:50 - 18:30
P5
Room: South Room 225
Panel Session 5
Simone Paci - (A)Voiding the Fiscal Contract: How Unequal Tax Compliance Constrains Demand for Redistribution
Matias Engdal Christensen - Mental Images of Inequality: Does the Perception of Economic Distances Influence Support for Redistribution?
Bastian Becker - EQUALITY VERSUS EFFICIENCY: The Big Tax Trade-off?
Teresa Hummler, Paul Vierus, Conrad Ziller - Can local social policies mitigate the impact of economic deprivation on political discontent?
Shir Raviv - Does Public Opinion on Redistribution Mean What We Think it Means?
(A)Voiding the Fiscal Contract: How Unequal Tax Compliance Constrains Demand for Redistribution
P5-01
Presented by: Simone Paci
Simone Paci
Columbia University
Recent information leaks and international scandals have cast the spotlight on tax noncompliance by the wealthy as a key driver of economic inequality across countries. However, the political response has been ambiguous, with policymakers offering both progressive reactions, such as wealth taxes, and regressive responses, such as flat tax systems. In this study, I approach this problem from the standpoint of public opinion and examine individual decision-making over the progressivity of the tax system when the issue of unequal tax compliance is salient. I argue that perceived tax cheating by the rich impacts redistributive attitudes, articulating four alternative hypotheses about the potential mechanism, founded in both material self-interest as well as normative logic. Findings from an original survey in Italy suggest that tax evasion lowers the demand for redistribution. Experimental results show that Italian respondents overestimated tax noncompliance and the salience of evasion and avoidance by the rich weakens preferences for tax progressivity.