Graduated Tax Rate Information and Tax Policy Perceptions and Preferences

Last registered on May 31, 2023
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Pre-Trial

Trial Information

General Information

Title
Graduated Tax Rate Information and Tax Policy Perceptions and Preferences
RCT ID
AEARCTR-0011366
Initial registration date
May 05, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
May 31, 2023, 10:54 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

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Primary Investigator

Name
Patrick Sullivan
Affiliation
University of Konstanz
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Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2023-05-08
End date
2024-05-08
Keywords
Governance
Additional Keywords
Social Preferences, Public Economics, Preferences, Tax Attitudes
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Previous literature and public opinion polling have indicated that a sizeable proportion of the American public misunderstands the graduated nature of the U.S. federal income tax. How these (mis)understandings affect perceptions and preferences of the federal income tax system are less well understood. I start by investigating the predictors of graduated tax rate understanding. Then, after randomly assigning a sample of U.S. respondents to an informational video highlighting the key workings of the federal income tax’s graduated tax rate structure, I estimate the effects of providing this information on an array of tax-related perceptions and preferences. Finally, I add an additional level of randomization which provides a common political claim about tax brackets to half of the respondents. I then estimate the effect of receiving accurate, political claims, and a combination of this information on attitudes towards the introduction of a new tax bracket that would affect only the highest of income earners.
External Link(s)

Registration Citation

Citation
Sullivan, Patrick. 2023. "Graduated Tax Rate Information and Tax Policy Perceptions and Preferences." AEA RCT Registry. May 31. https://doi.org/10.1257/rct.11366-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
To examine the impact of providing information about the graduated nature of the US federal income tax on tax policy perceptions and preferences, I implement a randomized survey experiment. The survey itself features two levels of randomization. Subjects will either be allocated to both treatment groups, a treatment and then control group, a placebo and then treatment group, or a placebo and then control group. This is further explained in the Experimental Design subsection below.
Intervention Start Date
2023-05-08
Intervention End Date
2023-05-31

Primary Outcomes

Primary Outcomes (end points)
The key outcome variables of the experiment include perceptions of how different groups would respond to entering a higher income tax bracket or having an increase in the top tax bracket rate, as well as views of the tax system more generally. Other key outcomes include preferences towards different aspects of the tax system, such as the rates applied to different tax brackets, support for flat-tax reform, and support for progressive tax policy.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
I plan to investigate the extent to which these treatment effects for the primary outcomes vary conditional on respondent characteristics, beliefs, and prior knowledge. These include, amongst others, education, income, political affiliation, ideology, marriage status, employment status, news consumption, personal experience with the tax and transfer system, and previous tax rate knowledge.

Additionally, I plan on using text analysis to provide a more descriptive picture about how groups of respondents think about different components of tax policy.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment ultimately takes on a 2x2 factoral design

For the first level of randomization, respondents will be randomly allocated to either a treatment or placebo group using Qualtrics’ randomization tool. The placebo group receives a video that restates a prior knowledge question, with a simplified visualization of income portions and tax brackets. The treatment group receives a video providing a detailed answer to the prior knowledge question, a simplified visualization of income ranges and tax brackets, and a clarification of the key differences between marginal and average tax rates.

Respondents are then asked most of the questions related to the Primary Outcomes (End Points) listed above.

For the second level of randomization, respondents are again allocated to either a treatment or control group and asked about their opinions on the introduction of a new, greatly increased federal income tax bracket. The control group is asked about attitudes towards this policy directly, while the treatment group receives a claim used by some opponents to the policy.
Experimental Design Details
Not available
Randomization Method
Randomized via survey software (Qualtrics)
Randomization Unit
Randomization unit at individual level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Approx. 1500 individuals
Sample size: planned number of observations
Approx. 1500 individuals (aged 18+)
Sample size (or number of clusters) by treatment arms
With two levels of randomization, approximately 375 individuals will receive neither treatment, 375 will receive the first but not second, 375 will receive the second but not first, and 375 individuals will receive both treatments
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
University of Konstanz Ethics Committee
IRB Approval Date
2023-05-05
IRB Approval Number
IRB Statement 18/2023
Analysis Plan

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