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Field
Abstract
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Before
This paper examines individuals' redistributive preferences and the motivations behind them. While the effects of information treatments on inequality perceptions are well established in the literature, how these perceptions translate into redistributive preferences remains unclear. To address this gap in the literature, we use two conjoint experiments and two information treatments. The first conjoint explores preferences for redistributive policies like income tax rates and unemployment benefits, while the second examines preferences for motivational factors for redistribution, such as fairness, efficiency, and the perceived societal impact of inequality. The first treatment exploits the timing of Finland’s Tax Day, with half of respondents surveyed before and half after. On the Tax Day, citizens' tax data is publicly released, and especially top earners' incomes and taxes are widely discussed in the media. The second treatment randomly assigns respondents to watch an informational video which discusses tax collection, public services funding, and potential downsides of poorly designed tax system. This way, we provide novel insights into how real-life and targeted information interventions influence redistributive preferences and the motivations behind them.
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After
This paper examines individuals' redistributive preferences and the motivations behind them. While the effects of information treatments on inequality perceptions are well established in the literature, how these perceptions translate into redistributive preferences remains unclear. To address this gap in the literature, we use two conjoint experiments and two information treatments. The first conjoint explores preferences for redistributive policies like income tax rates and unemployment benefits, while the second examines preferences for motivational factors for redistribution, such as fairness, efficiency, and the perceived societal impact of inequality. The first treatment exploits the timing of Finland’s Tax Day, with half of respondents surveyed before and half after. On the Tax Day, citizens' tax data is publicly released, and especially top earners' incomes and taxes are widely discussed in the media. The Tax Day is also a combined treatment with the US presidential elections occurring one day before the Tax Day. We thus also assess the impact of US presidential elections on the choice of motivational factors such as trust and inequality’s effects on societal stability. The second treatment randomly assigns respondents to watch an informational video which discusses tax collection, public services funding, and potential downsides of poorly designed tax system. This way, we provide novel insights into how real-life and targeted information interventions influence redistributive preferences and the motivations behind them.
*Mentions of the US elections added on 4.11.2024
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Last Published
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Before
October 28, 2024 12:56 PM
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After
November 04, 2024 09:33 AM
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Intervention (Public)
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Before
Our study includes two interventions.
The first intervention is real-life shock in the form of the Finnish Tax Day. On the tax day of citizens' tax data is made publicly available and especially earners' incomes and taxes are reported and discussed in the media. Half of the respondents are surveyed before the Tax Day and the other half after.
The second intervention randomly assigns half of the respondents to watch an informational whiteboard animation video of the role of taxes and public spending in redistributing income.
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After
Our study includes two interventions.
The first intervention is real-life shock in the form of the Finnish Tax Day. On the tax day of citizens' tax data is made publicly available and especially earners' incomes and taxes are reported and discussed in the media. Half of the respondents are surveyed before the Tax Day and the other half after. The Tax Day is also a combined treatment with the US presidential elections occurring one day before the Tax Day.
The second intervention randomly assigns half of the respondents to watch an informational whiteboard animation video of the role of taxes and public spending in redistributing income.
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Primary Outcomes (End Points)
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Before
The study has four primary research questions:
1. What kind of redistributive preferences individuals have?
2. What motivations drive redistributive preferences?
3. How information provision about how public sector operates shifts the individuals’ redistributive preferences and the motivations underlying these preferences?
4. How real-life increase in the salience of income inequality affects the preferences for redistribution and the motivations for those preferences?
Following these research questions, first two outcomes of interests are (1) choices over a public policy package that contains redistributive elements and (2) choices over the motivational factors made by the individual in the survey.
The third outcome of interest is the effect of our information treatments on redistributive choice and motivational factor choice. We are interested in (a) how informational video about how public sector operates affects redistributive choice and motivational factor choice, (b) how the Finnish Tax Day (7.11.2024), when information about the incomes of top income earners from tax records is revealed, affects redistributive choice and motivational factor choice and; (c) how the combination of both treatments affects redistributive choice and motivational factor choice.
We hypothesize that:
1.The informational video about the role of taxes and public spending affects beliefs about the role of taxes in redistribution and tackling income inequality and could then affect preferences or motivations for redistribution.
2.The informational video about the role of taxes and public spending provides new information about the role of taxes in providing social security and public goods and could then affect preferences or motivations for redistribution.
3.The Finnish Tax Day increases income transparency and salience of income inequality, and informs respondents about others and one’s own relative position in income distribution.
4.The Finnish Tax Day shifts individuals’ beliefs about the fairness and efficiency of the Finnish tax system and could then affect preferences or motivations for redistribution.
5.The Finnish Tax Day increases information about tax planning.
6.The Finnish Tax Day increases information about the earning at the top of the income distribution and could then affect preferences or motivations for redistribution.
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After
The study has four primary research questions:
1. What kind of redistributive preferences individuals have?
2. What motivations drive redistributive preferences?
3. How information provision about how public sector operates shifts the individuals’ redistributive preferences and the motivations underlying these preferences?
4. How real-life increase in the salience of income inequality and salience of social stability affects the preferences for redistribution and the motivations for those preferences?
Following these research questions, first two outcomes of interests are (1) choices over a public policy package that contains redistributive elements and (2) choices over the motivational factors made by the individual in the survey.
The third outcome of interest is the effect of our information treatments on redistributive choice and motivational factor choice. We are interested in (a) how informational video about how public sector operates affects redistributive choice and motivational factor choice, (b) how the Finnish Tax Day (7.11.2024), when information about the incomes of top income earners from tax records is revealed, affects redistributive choice and motivational factor choice and; (c) how the combination of both treatments affects redistributive choice and motivational factor choice. We take into account that US Presidential elections take place just shortly before the Tax Day, which is both a confounding factor for the Tax Day and a potential additional treatment that may affect some responses. While the US presidential election does not shock knowledge about redistribution in Finland or it's salience, it may affect other responses such as which party to support or questions related to trust and whether income differences reduce societal stability and increase crime.
We hypothesize that:
1.The informational video about the role of taxes and public spending affects beliefs about the role of taxes in redistribution and tackling income inequality and could then affect preferences or motivations for redistribution.
2.The informational video about the role of taxes and public spending provides new information about the role of taxes in providing social security and public goods and could then affect preferences or motivations for redistribution.
3.The Finnish Tax Day increases income transparency and salience of income inequality, and informs respondents about others and one’s own relative position in income distribution.
4.The Finnish Tax Day shifts individuals’ beliefs about the fairness and efficiency of the Finnish tax system and could then affect preferences or motivations for redistribution.
5.The Finnish Tax Day increases information about tax planning.
6.The Finnish Tax Day increases information about the earning at the top of the income distribution and could then affect preferences or motivations for redistribution.
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Experimental Design (Public)
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Before
Our study contain a set of regular survey questions, two conjoint survey experiments, one information provision video experiment implemented within the survey and one real-life shock in the form of the Finnish Tax Day. The respondents are drawn from our survey partners (Taloustutkimus) respondent panel which is nationally representative on the level of age, gender, region (NUTS 2).
The survey proceeds in the following manner.
Respondents are divided into two groups by our real-life information treatment, the Finnish tax-day. We achieve this by half of the respondents being surveyed before the Tax Day and the other half after the Tax Day. The first survey window is between 22.10.2024 and 5.11.2024. The Tax Day takes place on 7.11.2024. The second survey window takes place between, 8.11.2024 and 22.11.2024.
The second treatment assignment is conducted at the start of the survey. Half of the people in both groups (before and after the Tax Day) are randomly assigned to watch an informational video of the role of taxes and public spending in redistributing income.
Before the video, all respondents answer basic demographic questions.
Then those who are randomly allocated to the video treatment proceed to video which cannot be skipped. The video is a whiteboard animation, which explains in simple manner how taxes are collected each year, why taxes are collected and what they are used for, and what benefits and costs are associated with tax collection.
Those without video treatment move straight into background questions that include demographic questions and questions about political preferences, values, knowledge of redistributive policies, trust, views about the world and one’s own life, and habits concerning media consumption. The English translation of questions can be found in the attached analysis plan.
In the last part of the survey, we run two conjoint survey experiments.
In the first conjoint, the respondents are presented with two cards, A and B, which both present policy packages that hypothetical parties in the next parliamentary elections are proposing in their party manifestos. Both cards include seven statements (attributes) regarding taxes and redistributive policies. The respondents are asked to choose which party, A or B they would rather vote. The respondents make the choice between the candidates six times. Each attribute category contains value realisations that are associated with a specific redistributive policy. The seven polices are: 1) income taxes; 2) unemployment benefit; 3) public health care; 4) national debt; 5) capital income tax; 6) progressivity of the income tax at the top and; 7) fuel taxes.
List below displays the attributes and their levels in the first conjoint. Each attribute has three levels. The value of each attribute is randomised for each card and the order of the attributes is randomised once for each respondent, but is the same on both cards and remains the same for the same respondent across the cards.
Income taxation:
• Increase income tax evenly by 1% across all income groups
• Keep the current level of income taxation
• Decrease income tax evenly by 1% across all income groups
Unemployment benefits:
• Make unemployment benefits more generous by increasing the basic daily allowance by 200 euros per month
• Keep the current level of unemployment benefits
• Tighten unemployment benefits by reducing the basic daily allowance by 200 euros per month
Public healthcare funding:
• Increase public healthcare funding by 1 billion euros per year
• Keep the current level of public healthcare funding
• Cut public healthcare funding by 1 billion euros per year
National debt:
• Be willing to take on an additional 1 billion euros of national debt per year
• Not seek to change the current level of national debt
• Aim to reduce national debt by 1 billion euros per year
Capital income tax:
• Increase capital gains tax by 2 percentage points
• Keep the current level of capital gains tax
• Decrease capital gains tax by 2 percentage points
Tax progression:
• Increase tax progression by raising the top income tax rate by 3%
• Keep the current level of tax progression
• Reduce tax progression by lowering the top income tax rate by 3%
Fuel tax:
• Increase the fuel tax by 5 cents per liter
• Keep the current level of fuel tax
• Decrease the fuel tax by 5 cents per liter
The second conjoint tests the motivation hypotheses detailed in the previous section, that is, what kind of views people have about reasons and consequences of income inequality and redistribution. In the conjoint, the respondents are presented with the personal opinions of two politicians A and B and are asked which of these individual politicians would they rather vote for in the next parliamentary elections. The opinions concern the possible effects and externalities of redistributive policies and taxation. The conjoint has five attributes which are: 1) fairness; 2) luck vs. effort; 3) efficiency; 4) trust in politicians and; 5) inequality’s effect on stability.
List below displays the attributes and their levels in the second conjoint. Each attribute has either two or three levels. The value of each attribute is randomised for each card and the order of the attributes is randomised once for each respondent, but is the same on both cards and remains the same for the same respondent across the cards.
Large income differences:
• Large income differences are unfair
• Large income differences are fair
Causes of large income differences:
• Large income differences are the result of good luck experienced by high earners
• Large income differences are the result of the hard work of high earners
Income redistribution and economic impact:
• Income redistribution would increase employment and boost economic growth
• Income redistribution does not have an impact on employment or economic growth
• Income redistribution would decrease employment and diminish economic growth
Trust in politicians:
• Politicians can be trusted to foster the common good of the citizens
• Politicians cannot be trusted to foster the common good of the citizens
Income inequality and societal stability:
• Large income differences reduce societal stability and increase crime
• Large income differences do not affect societal stability or crime
• Large income differences increase societal stability and reduce crime
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After
Our study contain a set of regular survey questions, two conjoint survey experiments, one information provision video experiment implemented within the survey and one real-life shock in the form of the Finnish Tax Day (and US Presidential elections). The respondents are drawn from our survey partners (Taloustutkimus) respondent panel which is nationally representative on the level of age, gender, region (NUTS 2).
The survey proceeds in the following manner.
Respondents are divided into two groups by our real-life information treatment, the Finnish tax-day. We achieve this by half of the respondents being surveyed before the Tax Day and the other half after the Tax Day. The first survey window is between 22.10.2024 and 5.11.2024. The Tax Day takes place on 7.11.2024. The second survey window takes place between, 8.11.2024 and 22.11.2024. The US Presidential elections take place on 5.11.2024, but likely the results will be discussed in the Finnish media on 6.11.2024, that is, one day before the Tax Day.
The second treatment assignment is conducted at the start of the survey. Half of the people in both groups (before and after the Tax Day) are randomly assigned to watch an informational video of the role of taxes and public spending in redistributing income.
Before the video, all respondents answer basic demographic questions.
Then those who are randomly allocated to the video treatment proceed to video which cannot be skipped. The video is a whiteboard animation, which explains in simple manner how taxes are collected each year, why taxes are collected and what they are used for, and what benefits and costs are associated with tax collection.
Those without video treatment move straight into background questions that include demographic questions and questions about political preferences, values, knowledge of redistributive policies, trust, views about the world and one’s own life, and habits concerning media consumption. The English translation of questions can be found in the attached analysis plan.
In the last part of the survey, we run two conjoint survey experiments.
In the first conjoint, the respondents are presented with two cards, A and B, which both present policy packages that hypothetical parties in the next parliamentary elections are proposing in their party manifestos. Both cards include seven statements (attributes) regarding taxes and redistributive policies. The respondents are asked to choose which party, A or B they would rather vote. The respondents make the choice between the candidates six times. Each attribute category contains value realisations that are associated with a specific redistributive policy. The seven polices are: 1) income taxes; 2) unemployment benefit; 3) public health care; 4) national debt; 5) capital income tax; 6) progressivity of the income tax at the top and; 7) fuel taxes.
List below displays the attributes and their levels in the first conjoint. Each attribute has three levels. The value of each attribute is randomised for each card and the order of the attributes is randomised once for each respondent, but is the same on both cards and remains the same for the same respondent across the cards.
Income taxation:
• Increase income tax evenly by 1% across all income groups
• Keep the current level of income taxation
• Decrease income tax evenly by 1% across all income groups
Unemployment benefits:
• Make unemployment benefits more generous by increasing the basic daily allowance by 200 euros per month
• Keep the current level of unemployment benefits
• Tighten unemployment benefits by reducing the basic daily allowance by 200 euros per month
Public healthcare funding:
• Increase public healthcare funding by 1 billion euros per year
• Keep the current level of public healthcare funding
• Cut public healthcare funding by 1 billion euros per year
National debt:
• Be willing to take on an additional 1 billion euros of national debt per year
• Not seek to change the current level of national debt
• Aim to reduce national debt by 1 billion euros per year
Capital income tax:
• Increase capital gains tax by 2 percentage points
• Keep the current level of capital gains tax
• Decrease capital gains tax by 2 percentage points
Tax progression:
• Increase tax progression by raising the top income tax rate by 3%
• Keep the current level of tax progression
• Reduce tax progression by lowering the top income tax rate by 3%
Fuel tax:
• Increase the fuel tax by 5 cents per liter
• Keep the current level of fuel tax
• Decrease the fuel tax by 5 cents per liter
The second conjoint tests the motivation hypotheses detailed in the previous section, that is, what kind of views people have about reasons and consequences of income inequality and redistribution. In the conjoint, the respondents are presented with the personal opinions of two politicians A and B and are asked which of these individual politicians would they rather vote for in the next parliamentary elections. The opinions concern the possible effects and externalities of redistributive policies and taxation. The conjoint has five attributes which are: 1) fairness; 2) luck vs. effort; 3) efficiency; 4) trust in politicians and; 5) inequality’s effect on stability.
List below displays the attributes and their levels in the second conjoint. Each attribute has either two or three levels. The value of each attribute is randomised for each card and the order of the attributes is randomised once for each respondent, but is the same on both cards and remains the same for the same respondent across the cards.
Large income differences:
• Large income differences are unfair
• Large income differences are fair
Causes of large income differences:
• Large income differences are the result of good luck experienced by high earners
• Large income differences are the result of the hard work of high earners
Income redistribution and economic impact:
• Income redistribution would increase employment and boost economic growth
• Income redistribution does not have an impact on employment or economic growth
• Income redistribution would decrease employment and diminish economic growth
Trust in politicians:
• Politicians can be trusted to foster the common good of the citizens
• Politicians cannot be trusted to foster the common good of the citizens
Income inequality and societal stability:
• Large income differences reduce societal stability and increase crime
• Large income differences do not affect societal stability or crime
• Large income differences increase societal stability and reduce crime
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