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Why do you want lower taxes? Preferences regarding municipal income tax rates

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  • Jakobsson, Niklas

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

The factors shaping people’s preferences for municipal labour income tax rates in Sweden were assessed, using survey data. The tax rate actually faced by the respondents had explanatory power for their attitudes towards the tax rate only when a few socio-demographic explanatory variables were included. When a richer set of variables were included the association disappears. The hypothesis that this small or nonexistent effect from the actual tax rate is caused by a Tiebout bias finds no support, but IV-estimations indicate that the actual municipal tax rate may be of importance for the attitudes towards the tax rate. People with higher education, regularly reading a newspaper, agreeing with the political left, and stating that they were satisfied with the municipal services were less likely to want to decrease the municipal tax. People with low income, stated low knowledge about society, and agreeing with the political right were instead more likely wanting to decrease the municipal tax.

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File URL: http://hdl.handle.net/2077/19457
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 345.

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Length: 23 pages
Date of creation: 23 Feb 2009
Date of revision:
Handle: RePEc:hhs:gunwpe:0345

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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: tax preferences; attitudes; income tax;

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  1. Courant, Paul N & Gramlich, Edward M & Rubinfeld, Daniel L, 1979. "Public Employee Market Power and the Level of Government Spending," American Economic Review, American Economic Association, American Economic Association, vol. 69(5), pages 806-17, December.
  2. Hanna Ågren & Matz Dahlberg & Eva Mörk, 2007. "Do politicians’ preferences correspond to those of the voters? An investigation of political representation," Public Choice, Springer, Springer, vol. 130(1), pages 137-162, January.
  3. Rubinfeld, Daniel L & Shapiro, Perry & Roberts, Judith, 1987. "Tiebout Bias and the Demand for Local Public Schooling," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 426-37, August.
  4. Henrik Hammar & Sverker C. Jagers & Katarina Nordblom, 2008. "Attitudes towards Tax Levels: A Multi-Tax Comparison," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 29(4), pages 523-543, December.
  5. Norman Gemmell & Oliver Morrissey & Abuzer Pinar, 2004. "Tax perceptions and preferences over tax structure in the united kingdom," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(493), pages F117-F138, 02.
  6. Gregory D. Hess & Athanasios Orphanides, 1994. "Taxation and intergenerational transfers with family size heterogeneity: do parents with more children prefer higher taxes?," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 94-8, Board of Governors of the Federal Reserve System (U.S.).
  7. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 64, pages 416.
  8. Ahlin, Ã…sa & Johansson, Eva, 2001. "Individual demand for local public schooling: Evidence from Swedish survey data," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2001:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  9. Bergstrom, Theodore C & Rubinfeld, Daniel L & Shapiro, Perry, 1982. "Micro-Based Estimates of Demand Functions for Local School Expenditures," Econometrica, Econometric Society, Econometric Society, vol. 50(5), pages 1183-1205, September.
  10. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, Econometric Society, vol. 47(2), pages 263-91, March.
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