The Role of Misconceptions in Support for Regressive Tax Reform

In this paper, I use data from an exceptionally detailed survey of attitudes toward taxation in the United States to investigate the relative importance of one particular misconception—that high–income people would pay more tax under an apparently regressive reform, mostly because many people believe that the distribution of the burden of the existing income tax is regressive—in explaining public support for a fl at tax and a retail sales tax. I find that this policy misconception is strongly associated with support for replacing the existing income tax with either of these two alternatives. A similar misconception about the distributional impact of the estate tax explains some of the support for eliminating that tax.