Housing Wealth and Tax Preferences Across Europe
Type
conference paper
Date Issued
2023-01-30
Author(s)
Abstract
Despite being much more unequally distributed than income, wealth as a determinant of political preferences has received comparatively little attention. We address this gap by studying how housing wealththe bulk of private wealth for most ordinary citizens-affects attitudes towards the taxation of income, inheritance, capital gains, and wealth. We leverage data from 7 European countries from an original survey including a conjoint and an information experiment. We find that compared to renters, homeowners and children of homeowners prefer less progressive taxation of wealth and inheritances. We can further show that this effect is driven by homeowners who own their house outright, while homeowners with a mortgage have more moderate preferences. People who believe they are wealthy relative to others are likewise less supportive of progressive taxation. This supports a view of homeowners as rational economic actors who are particularly opposed to taxes that predominantly affect them. In the conjoint, we find that people favour progressive but overall lower taxes. Furthermore, when forced to choose between joint income and inheritance tax schedules, income tax takes precedence, even for homeowners. Finally, in the information experiment we find no evidence that informing people about the level of income or wealth inequality in their country leads to more progressive tax preferences. Overall, this paper provides the most comprehensive investigation of housing wealth and tax preferences in Europe to date and contributes to an increasingly salient public and academic debate.
Language
English
Refereed
No
Event Title
Conference of the Swiss Political Science Association
Event Location
Basel
Event Date
03-02-2023