Article

What do we know about the taxes we pay? And does knowing more change the way we think about redistribution?

Dirk Foremny, Universitat de Barcelona;
Winning article of the Call to support social research projects based on the conducting of surveys, 2019.

Results from a large survey experiment in Spain (the study surveys 6,000 respondents) show that people have major misperceptions about the level of taxes they pay and the level of government that sets tax rates and receives revenues. Respondents underestimate their true tax burden and are mostly unaware that the autonomous communities have a substantial degree of autonomy to change the tax rates. In the experiment, the survey provides the correct information about the tax system to some participants, who can then be compared to those who did not receive this information. The results show that the effects of this information are sizeable. After the treatment people prefer a more progressive tax system, think differently about inequality, and become more opposed to tax evasion.
Key points
  • 1
       The study documents a sizeable bias in what citizens believe about their tax payments and the level of government that receives the revenues.
  • 2
       In general, people are in favor of redistributive policies. Respondents regard inequality as problematic, believe the poor should pay less tax, and would choose a progressive tax system over any alternative.
  • 3
       Providing the true information about the tax system during the survey increases the support for redistributive policies. This is shown by evaluating the effect relative to a control group which did not receive additional information.
  • 4
       People who learned about their true tax burden during the experiment are in favor of an even more progressive tax system. The experiment shows that they would tax the rich with a tax rate 3 points higher compared to the control group. Respondents who received the information about the autonomy of the autonomous communities to change tax rates were more likely to regard inequalities as a serious problem.
Public opinion about the level of taxes on the poor
Public opinion about the level of taxes on the poor

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