Understanding Attitudes Toward Progressive Taxation

Abstract

This article examines attitudes toward and under- standing of progressive taxation by comparing subjects' choices of fair tax rate structures in response to questions framed in both abstract and concrete terms. Consistent with surveys of the gen- eral public, a majority of the subjects indicated a preference for progressive taxation in response to abstract questions. However, consistent with results from social psychology and political sci- ence research, the subjects' preferences for progressive taxation were significantly different (lower) in response to concrete ques- tions. The observed preference reversal between progressive taxes in the abstract and flat taxes (i.e., proportional to income) in concrete situations is hypothesized to be associated with sub- jects' ignorance (their lack of understanding of the abstract con- cept of progressive taxation). Thus, between-subjects tests are conducted to examine (1) differences in order effects of the ab- stract and concrete frames that might cue the subjects to a greater understanding of the abstract terms, (2) the effects of definitions and illustrations on subjects' choices, and (3) the use of different scales and reference points to measure responses. Consistent re- sults (preference reversals from preferences for progressivity in the abstract to nonprogressive preferences in concrete frames) were obtained across all of the between-subjects experimental manipulations. A within-subjects design also includes a posttest knowledge test that demonstrates the tendency of a majority of