Academic journal article Political Research Quarterly

Inequality, Self-Interest, and Public Support for "Robin Hood" Tax Policies

Academic journal article Political Research Quarterly

Inequality, Self-Interest, and Public Support for "Robin Hood" Tax Policies

Article excerpt

Abstract

Influential economic models predict that as inequality increases, the public will demand greater redistribution. However, there is limited research into the determinants of support for redistributive tax increases because such proposals have been so rare in America in recent decades. We use Washington State's Proposition 1098 to examine how economic self-interest, concerns about inequality, and partisanship influence support for redistributive taxation. The results show that all of these factors influenced support, with strong support among the lower income, indicating that when the distributional implications of policies are clear, citizens can translate their self-interest and broad attitudes into congruent redistributive preferences.

Keywords

inequality, redistribution, public opinion, taxation

Introduction

During the last few decades, income inequality has sky- rocketed. Influential economic models predict that under such conditions, out of self-interest, the public (especially the lower income) will demand and the government will provide more redistribution (Meltzer and Richard 1981), requiring higher taxes on the wealthy. In contrast, a long stream of political science research suggests that broader attitudes and values are often a more important determi- nant of policy preferences (Sears et al. 1980), leading to the expectation that views toward growing inequality should determine redistributive policy preferences. But existing research questions whether the public is capable of tying its own economic self-interest or broad attitudes toward inequality and taxation to views on specific tax policy proposals (Bartels 2005; Roberts, Hite, and Bradley 1994). Most research, however, has focused on abstract attitudes toward tax policy or the determinants of public support for specific tax cuts, simply because pro- posals to increase taxes on the wealthy have been so rare in America in recent years. In this article, we take advan- tage of one of the rare proposals to raise taxes on the wealthy, Washington State's Proposition 1098, to exam- ine how self-interest, attitudes toward inequality, and par- tisanship influence support for "Robin Hood" tax policies. We find that in this context, where the costs and benefits of the policy were made very clear in the structure of the policy and elite debates, voters are able to link their eco- nomic self-interest to congruent policy preferences, and that this relationship did not require a high level of attention to the debate. We also find that broader attitudes toward inequality and partisanship shape support for 1098.

The question of what determines public support for progressive tax increases and redistribution in an increas- ingly unequal era is critically important. The dramatic increase in economic inequality is one of the most strik- ing developments in America in recent years, and researchers have convincingly demonstrated that govern- ment policies help create or exacerbate economic inequal- ities (Hacker and Pierson 2010; Kelly 2009). A small proportion of the population that has received large tax cuts has done very well economically while most of the country struggles. As governments at all levels face increasing fiscal pressure, raising taxes on the rich will become an increasingly salient issue. Indeed, this issue is ultimately at the heart of party conflict in America. Republican 2012 presidential candidate, Mitt Romney, campaigned on more tax cuts for the wealthy, while Democrat Obama argued for tax rates on the high income to return to Clinton-era levels. In the abstract, the public seems to agree with Obama that the wealthy should pay higher taxes (McCall and Kenworthy 2009), and in January 2013, Congress raised taxes on those earning more than $400,000 per year. But taxes on the wealthy remain very low by post-World War II standards, reflect- ing that in actual policy debates in recent years, the public has often supported large tax cuts for the wealthy (Bartels 2005). …

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