Transfer payments are a large and growing part of the budgets of all levels of government in the US. Many of these transfer payment programs help people based upon their income level, but transfers are also used to assist victims of natural disasters, such as hurricanes and tornados, regardless of income. Opinions regarding the use of tax money for the purposes of redistribution may differ depending upon which of these two classes of problems it is intended to address. Voter support for redistribution may differ if it is designed to change the earned income distribution as opposed to remedying losses due to forces beyond an individual's control.
The researchers propose an agenda intended to provide a better understanding of how people form preferences for such redistributive taxation with a specific intent to analyze any differences between whether the money is used to fund benefits to the poor or as a form of social insurance against catastrophic events. The project involves laboratory experiments in which subjects earn money through a task involving real effort and then vote on a tax rate to raise money for redistribution. By varying how the redistribution is carried out - i.e., to equalize earnings or to restore losses - as well as other variables such as the probability of a catastrophic event, the researchers will observe how voting behavior changes with these controls. Subjects will complete questionnaires and other tasks to elicit their general political ideology as well as their attitudes towards risk as further controls on the results. The principal intellectual merit of the proposed research lies in its potential contribution to understanding the micro-foundations of support for redistributive taxation in a democracy. The investigators design laboratory experiments that distinguish voters' preferences under various choice settings; the results will contribute to understanding the interplay of preferences, rules, ideology, and support of redistributive taxation.
The proposed research has broader impacts on public policy and in several fields of research and teaching, such as political science and behavioral economics. In the first case, the research will offer policymakers who are faced with making redistributive policies insight on how, when, and why citizens would be willing to support certain types of redistributive policies. The project will affect teaching by involving graduate students in political science, economics, and allied social sciences through their work as research assistants in the laboratory where the work will be conducted, their participation in cross-disciplinary seminars where the work will be presented and discussed, and in classes where they may conduct secondary analyses of the data that are collected in the project.
