Taxing Higher Incomes: What Makes the High-Income Earners Consent to More Progressive Taxation in Latin America?

Taxing Higher Incomes: What Makes the High-Income Earners Consent to More Progressive Taxation in... When do high-income earners get ‘on board’ with the fiscal contract and accept paying a larger share of the tax burden? Progressive taxes perform particularly poorly in developing countries. We argue that the common opposition of the affluent to more progressive taxation is not merely connected to administrative limitations to coercively enforce compliance, but also to the uncertainty that high-income earners associate with the returns to taxes. Because coercion is not an option, there is a need to convince high-income earners to ‘invest’ in the public system via taxes. Trust in institutions is decisive for the fiscal contract. Expecting that paid contributions will be used in a sensible manner, high-income earners will be more supportive of progressive income taxation. We study tax composition preferences of a cross-section of Latin American countries using public opinion data from LAPOP for 2012. Findings reveal that higher levels of trust in political institutions strongly mitigate the opposition of the affluent towards more progressive taxation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Political Behavior Springer Journals

Taxing Higher Incomes: What Makes the High-Income Earners Consent to More Progressive Taxation in Latin America?

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Publisher
Springer US
Copyright
Copyright © 2016 by Springer Science+Business Media New York
Subject
Political Science and International Relations; Political Science; Sociology, general
ISSN
0190-9320
eISSN
1573-6687
D.O.I.
10.1007/s11109-016-9376-2
Publisher site
See Article on Publisher Site

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