Billionaire Superstar: Public Image and Demand for Taxation

In the United States, there are 741 billionaires with a combined net worth of $5.2 trillion. Despite this extreme inequality, billionaires face effective tax rates lower than those of the average American. We examine how the public image of billionaires shapes support for taxing them, using a pre-registered survey experiment with 9,013 Americans. Subjects were randomly assigned to one of four treatments, each emphasizing a different aspect of billionaires’ public image: the role of luck in building the billionaires’ wealth, their lavish consumption, the scale of their fortunes, and their average tax rates. All four treatments significantly and strongly affected the intended beliefs—for instance, information about how the billionaires made their fortunes significantly increased the perceived role of luck. Moreover, all treatments elicited strong emotional reactions. A panel of academic experts predicted that all four treatments would substantially increase demand for taxation. In sharp contrast, we find that only one treatment—providing information about lavish lifestyles—had a robust positive effect on support for taxation, while another—focused on effective tax rates—had a strong negative effect. We discuss implications for both researchers and policymakers.