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Effects of signalling tax evasion on redistribution and voting preferences: Evidence from the Panama Papers

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  • Laila Ait Bihi Ouali

Abstract

This paper provides empirical evidence that individuals substantially revise their stated wealth redistribution preferences after fiscal scandals. The 2016 Panama Papers scandal revealed top-income tax evasion behaviour simultaneously worldwide. The empirical investigation exploits this event as a quasi-natural experiment. I rely on two original datasets, a UK household longitudinal dataset and a survey conducted in 22 European countries. I use a difference-in-differences strategy and find that pro-redistribution statements increased between 2% and 3.3% after the scandal. Responses are heterogeneous and larger for right-wing individuals and low-income individuals. This change in wealth redistribution preferences is likely to have been translated into a slight change in votes. The results suggest an increase in stated voting intentions for the left and a decrease for the right. Complementary estimations reveal that more media coverage and more individuals involved by country increase the magnitude of the response.

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  • Laila Ait Bihi Ouali, 2020. "Effects of signalling tax evasion on redistribution and voting preferences: Evidence from the Panama Papers," PLOS ONE, Public Library of Science, vol. 15(3), pages 1-22, March.
    • Handle: RePEc:plo:pone00:0229394
    DOI: 10.1371/journal.pone.0229394
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    Cited by:

    1. AitBihiOuali, Laila & Graham, Daniel J., 2021. "The impact of the MeToo scandal on women’s perceptions of security," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 269-283.

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