Do Americans Want to Tax Wealth? Evidence from Online Surveys.

General Information

Do Americans Want to Tax Wealth? Evidence from Online Surveys.
Raymond Fisman, Keith Gladstone, Ilyana Kuziemko and Suresh Naidu
Publication Type
Working paper
A vast theoretical literature in public finance has studied the desirability of capital taxation. This discussion largely ignores the political feasibility of taxing wealth. We provide, to our knowledge, the first investigation of individuals' preferences over jointly taxing income and wealth. We provide subjects with a set of hypothetical individuals' incomes and wealth and elicit subjects' preferred (absolute) tax bill for each individual. Our method allows us to unobtrusively map both income earned and accumulated wealth into desired tax levels. Our regression results yield roughly linear desired tax rates on income of about 14 percent. Respondents' suggested tax rates indicate positive desired wealth taxation. When we distinguish between sources of wealth we find that, in line with recent theoretical arguments, subjects' implied tax rate on wealth is three percent when the source of wealth is inheritance, far higher than the 0.8 percent rate when wealth is from savings. Textual analysis of respondents' justifications for their tax rates imply limited concern for the elasticity of tax bases with respect to net-of-tax rates.