Eliciting preferences for income redistribution: A new survey item

Abstract

This paper introduces a new survey item through which to measure people’s preferences toward income redistribution. Respondents construct their preferred distribution of after-tax income by changing the tax rates of the bottom four income quintiles. Taxes for the top quintile update automatically in order to keep government revenues fixed and take into account behavioral effects on pre-tax income. Data from a large, representative sample of the Dutch population indicates that around 50–60% of the respondents construct distributions that are more equal overall than the status quo, as measured by the Gini coefficient. Indeed, only 5% of respondents opt for greater inequality, but not beyond a flat-tax. Income ratios for the bottom and top half of the distribution indicate greater support for additional redistribution among those on higher rather than lower incomes. The validity of the responses to the new item is supported by their predictive power for voting behavior in the parliamentary elections almost three years later, even when controlling for a Likert scale. Two information provision experiments illustrate the richness of the new data.