Public support for tax policies in COVID-19 times: Evidence from Luxembourg

Research output: Working paper

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Abstract

We study attitudes towards the introduction of hypothetical new taxes to finance the cost of the COVID-19 pandemic. We rely on survey data collected in Luxembourg in 2020. The survey asks for the agreement of respondents over: a one-time net wealth tax, an inheritance tax, a temporary solidarity income tax, and a temporary increase in VAT. All questions include different and randomly assigned tax attributes (tax rates and exemption amounts). We find a clear divide with relatively
high support for new wealth and inheritance taxes on the one hand and a low support for increases in VAT and income taxes on the other hand. While 58% of respondents agree or strongly agree with a one-time tax levied on net worth, only
24% are in favor of a small increase in VAT. Support for any tax is however negatively associated with the size of the tax as measured by the predicted revenues. Our results indicate that a one-time wealth tax could raise substantial revenues and
still garner public support.
Original languageEnglish
Place of PublicationEsch-sur-Alzette
PublisherLISER
Number of pages32
Publication statusPublished - 19 Nov 2021

Publication series

NameWorking papers
PublisherLISER
No.2021-10
ISSN (Electronic)2716-7445

Keywords

  • COVID-19
  • wealth tax
  • income tax
  • VAT
  • preference for redistribution

Liser Collections

  • Les working papers du Liser

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