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Why do the poor vote for low tax rates? A (real-effort task) experiment on income redistribution

Author

Listed:
  • Natalia Jiménez Jiménez

    () (Departamento de Economía, Métodos Cuantitativos e Historia Económica, University Pablo de Olavide.)

  • Elena Molis

    () (Department of Economic Theory and Economic History, University of Granada.)

  • Ángel Solano García

    () (Department of Economic Theory and Economic History, University of Granada.)

Abstract

The main purpose of this paper is to shed some light on the voting behavior of low-income voters over income redistribution. To this end, we test a model based on Meltzer and Richard’s (1981) framework through a lab experiment in which individuals vote over two exogenous tax rates and their pre-tax income is determined according to their performance in a real-effort task. We classify individuals into highskilled and low-skilled participants according to their performance in a tournament at the beginning of the experiment. We find that a large proportion of low-skilled workers vote for the lowest tax rate (the one that gives them the lowest payoff), especially when the alternative tax rate is very high. However, this proportion is significantly reduced in treatments in which the subjects are given extra information about how the tax operates in redistributing income. This result suggests that the lack of information about the role of taxes in income redistribution may be an important factor in explaining the counter-intuitive voting behavior of low-income voters over income redistribution. We also find that both the prospect of upward mobility and the belief in the negative effect of taxes on productivity make low-income voters support low tax rates, especially when the alternative tax rate is very high.

Suggested Citation

  • Natalia Jiménez Jiménez & Elena Molis & Ángel Solano García, 2019. "Why do the poor vote for low tax rates? A (real-effort task) experiment on income redistribution," ThE Papers 19/11, Department of Economic Theory and Economic History of the University of Granada..
  • Handle: RePEc:gra:wpaper:19/11
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    References listed on IDEAS

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    More about this item

    Keywords

    income inequality; income redistribution; voting; taxation; real-effort task.;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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