Time Preference and Tax Burden Acceptance: Asymmetric Effects on Intertemporal and Contemporaneous Redistribution

TL;DR

This study investigates how individual time preferences influence acceptance of different types of tax redistribution, finding that higher time preference correlates with lower acceptance, especially for immediate transfers.

Contribution

It reveals asymmetric effects of time preferences on intertemporal and contemporaneous redistribution acceptance, highlighting a stronger negative association for immediate transfers.

Findings

Higher time preference correlates with lower acceptance of redistribution.

Negative association is stronger for immediate (contemporaneous) transfers.

Results based on a large online survey with 12,000 observations.

Abstract

This paper examines the extent to which individual time preferences are associated with the willingness to accept different tax burdens. The first is an intertemporal redistribution in which a current consumption tax increase is exchanged for a proportional future reduction. The second is a contemporaneous redistribution where the tax burden borne by individuals is transferred directly to those with significantly lower incomes than their own. Using a cross-sectional online survey of approximately 12,000 observations, we found through various regression analyses that higher time preference is negatively associated with acceptance in both domains. Crucially, the negative coefficient is larger in absolute value for contemporaneous redistribution than for the intertemporal one.