Self-Interest, Inequality concerns and Public Support for Inheritance Taxation

Last registered on September 25, 2020
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Pre-Trial

Trial Information

General Information

Title
Self-Interest, Inequality concerns and Public Support for Inheritance Taxation
RCT ID
AEARCTR-0006524
Initial registration date
September 25, 2020

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
September 25, 2020, 1:54 PM 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
Guido Schwerdt
Affiliation
University of Konstanz
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Other Primary Investigator(s)

PI Name
Mark Kapteina
PI Affiliation
Kapteina
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PI Name
Kattalina Berriochoa
PI Affiliation
University of Konstanz
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PI Name
Luna Bellani
PI Affiliation
University of Konstanz
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Additional Trial Information

Status
On going
Start date
2020-09-07
End date
2022-09-30
Keywords
Governance
Additional Keywords
Economic inequality; Inheritance tax; Survey experiment; Preferences; Tax attitudes
JEL code(s)
Secondary IDs
Abstract
Across most developed countries, wealth inequality is on the rise. While inheritance is related to this gap in wealth, inheritance taxation remains unpopular with the public. In this trial, we investigate the mechanisms that drive public opinion for inheritance taxes. Specifically, we examine how self-interest or perceptions of inherited wealth shift public preferences. To examine our research question, we designed a survey experiment where randomly selected subgroups of the German population receive an information treatment, relative to inheritance taxes, to update their knowledge and subsequent preferences for policy changes. To this end, we developed three information treatments. The first information treatment informs respondents about the size of the tax allowance for inheritances in Germany. The second information treatment informs respondents about the share of inherited wealth in Germany and its increase in the last 50 years. The third information treatment is a combination of the two. Using an instrumental variable approach, we will evaluate the impact of these different information treatments in order to assess changes in public opinions on abolishing or increasing the inheritance tax. The goal of our survey experiment is to examine if learning about current inheritance allowances or the persistence of wealth across generations drives public opinion on inheritance tax policy changes.
External Link(s)

Registration Citation

Citation
Bellani, Luna et al. 2020. "Self-Interest, Inequality concerns and Public Support for Inheritance Taxation." AEA RCT Registry. September 25. https://doi.org/10.1257/rct.6524
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
To examine the driving force behind public support for inheritance taxation, we design a survey module with an embedded experiment. The module is part of a representative opinion survey on inequality and social mobility in Germany, conducted by the University of Konstanz. Depending on the experimental group, subjects are part of the control group or belong to one of the three treatment groups.
Intervention Start Date
2020-09-07
Intervention End Date
2020-09-28

Primary Outcomes

Primary Outcomes (end points)
Our primary outcomes of interest are subjects’ opinion on four policy proposals on taxation of inheritances and
wealth taxation elicited in the questionnaire.

Question wording
“To what extent do you agree to the following policy reforms?”

Items:
The inheritance tax should be abolished
The inheritance tax should be increased
A wealth tax on all assets should be introduced
The tax exemptions on family enterprises should be abolished

Answer categories:
5-point
scale: 1=”I strongly disagree”, 2=”I somewhat disagree”, 3=”I neither agree nor disagree”, 4=”I somewhat agree”, 5=”I strongly agree”
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Our secondary outcomes of interest are subjects’ perceptions about inherited wealth elicited in the questionnaire. The
block consists of 4 independent questions.

Question wording
“To what extent do you agree to the following statement: My heirs or I will pay inheritance tax in the future?
“To what extent do you agree to the following statement: In Germany,large wealth is mainly inherited.”
“In your opinion, is wealth inequality between the rich and the poor a serious problem?”
“In your opinion, what is the main reason why some people get rich?”

Answer categories:
Questions
1 & 2: 5-point scale: 1=”I strongly disagree”, 2=”I somewhat disagree”, 3=”I neither agree nor disagree”, 4=”I somewhat agree”, 5=”I strongly agree”

Question 3: 5-point scale: 1=“No problem at all”, 2=”a small problem”, 3=”an intermediate problem”, 4=”a serious problem”, 5=”a very serious problem”

Question 4: “They work more than others”, “Luck or unfairness in society”
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment will consist of four groups, a control and three treatment groups with equal weights in the randomization. The treatment groups with be presented with information on inheritance tax allowances and the share of inherited wealth in Germany. All groups will be asked about their expectation to be affected by the inheritance tax, perceived share of inherited wealth, and perception of wealth as a problem. They are then asked for their preferences for abolishing and changing the inheritance tax in Germany as the final outcome variable. A battery of control variables will also be solicited in the survey. We conduct the experiment in a sample of 6,000 adults aged 18 years and older. The German survey institute, KANTAR is doing the fieldwork of the survey. KANTAR is going to manage the recruitment and collect the data via an online platform. Therefore, our participants answer the survey questions autonomously on their own digital devices. The randomization is done by KANTAR at the individual level.

Our experiment is structured as follows:
Respondents will be randomly assigned to the control group (p=1/4), treatment 1 (p=1/4), treatment 2 (p=1/4) or treatment 3 (p=1/4).

Control group: Baseline information that children have to pay a tax on the bequest from their parents

Treatment 1: Information about the size of the tax allowance for children, who inherit from their parents

Treatment 2: Information on the level and the increase in the share of inherited wealth in Germany

Treatment 3: Combination of treatment 1 and treatment 2
Experimental Design Details
Not available
Randomization Method
Randomization is carried out by the survey company KANTAR, using a computer.
Randomization Unit
Randomization Unit at the individual level.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
6,000 individuals
Sample size: planned number of observations
Sample size: 6,000 individuals (aged 18 years and older)
Sample size (or number of clusters) by treatment arms
Sample size by treatment arms: 6,000 individuals, 1/4 (app. 1500) will be assigned to each of the four experimental groups.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan