Information of income position and its impact on perceived tax burden and preference for redistribution: An Internet Survey Experiment

TL;DR

This study uses an internet survey experiment in Japan to explore how knowledge of actual income position affects perceptions of tax burden and redistribution preferences, revealing limited change in preferences and highlighting the role of reciprocity.

Contribution

It provides novel experimental evidence on the impact of income position information on tax perceptions and redistribution preferences in Japan.

Findings

Informed individuals perceive higher tax burden if their income is higher than believed.

Preferences for redistribution remain largely unchanged after income information.

Reciprocal individuals perceive larger tax burdens and favor redistribution more.

Abstract

A customized internet survey experiment is conducted in Japan to examine how individuals' relative income position influences preferences for income redistribution and individual perceptions regarding income tax burden. I first asked respondents about their perceived income position in their country and their preferences for redistribution and perceived tax burden. In the follow-up survey for the treatment group, I provided information on their true income position and asked the same questions as in the first survey. For the control group, I did not provide their true income position and asked the same questions. I gathered a large sample that comprised observations of the treatment group (4,682) and the control group (2,268). The key findings suggest that after being informed of individuals' real income position, (1) individuals who thought their income position was higher than the true one perceived their tax burden to be larger, (2) individuals' preference for redistribution hardly changes, and (3) irreciprocal individuals perceive their tax burden to be larger and are more likely to prefer redistribution. However, the share of irreciprocal ones is small. This leads Japan to be a non-welfare state.