Preferences for Income Redistribution : A New Survey Item and Experimental Evidence

This paper introduces a new survey item to measure preferences for income redistribution. Respondents construct their preferred distribution of after-tax income by changing the tax rates of the bottom four income quintiles. Taxes for the top income quintile update automatically to keep government revenues fixed and take into account the costs of redistribution. Dutch data indicate that around 50-60% prefer more equality. Only 5% opt for more inequality, but not beyond a at-tax. We investigate the formation of redistributive preferences. Information about efficiency costs of taxation and the use of social insurance among low incomes shifts preferences towards greater inequality