Non-Transcational Tax Preferences

Political science literature has largely dismissed the notion that rising inequality should drive voters to support high taxes on the wealthy to fund redistribution. Yet, the vast majority of this literature examines countries that already have reasonably progressive tax regimes, high state capacity, and experience of redistributive taxation. In this paper, we explore the limited demand for progressive taxation in countries that are attempting, but struggling, to increase taxes on the wealthy, and we ask why. We argue that individuals in countries without experience with progressive taxation are less likely to think transactionally about taxation. In such contexts, citizens will take a protective approach to taxation, seeking to ensure the state does no harm in imposing taxes. We test our expectations through conjoint experiments in three countries during the early stages of establishing more progressive tax regimes: Mexico, Colombia, and Brazil. We find no cross-country and within-country evidence that individuals seek redistributive taxation, not even where it is in their self-interest to do so. Then, through a survey experiment in Brazil, we find that individuals would increase their demands for redistributive taxation if the transactional logic were made explicit. These findings help explain why individuals in highly unequal countries may desperately want to take care of the poor, but have little or no appetite to use redistributive taxation to achieve that aim.