Tax fairness: Shifting the tax burden towards the upper end?

Abstract

Scheve and Stasavage (2016) argue that different fairness norms were historically linked to changes in tax progressivity. Based on this work, we explored three fairness principles underpinning tax rates determination: equality (i.e., the government should treat all citizens equally), ability to pay (i.e., rich individuals have the ability to pay more taxes), and compensation (i.e., rich individuals should compensate for previous privileges). Across one archival study on 84 National constitutions and two main studies (Ntotal = 697), we investigated the emergence and preference for these norms and their relation with attitudes towards inequality and redistribution. In support of Scheve and Stasavage's arguments, results show that, when applied to taxation, compensation is the least mentioned in National constitutions; nevertheless, its endorsement is the strongest predictor of the support of higher tax rates for the wealthiest part of society. Importantly, however, people struggle with explicitly distinguishing the compensation and ability to pay beliefs, suggesting that these principles may be engaged at a more implicit level.