Public Support for Tax Policies in COVID-19 Times: Evidence from Luxembourg

[en] 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.

Disciplines :

Sociology & social sciences
Social economics

Author, co-author :

Olivera, Javier; Luxembourg Institute of Socio-Economic Research - LISER

van Kerm, Philippe ; University of Luxembourg > Faculty of Humanities, Education and Social Sciences (FHSE) > Department of Social Sciences (DSOC)

External co-authors :

Language :

English

Title :

Public Support for Tax Policies in COVID-19 Times: Evidence from Luxembourg

Publication date :

2022

Journal title :

International Tax and Public Finance

Volume :

Pages :

1395-1418

Peer reviewed :

Peer reviewed

Funders :

FNR - Fonds National de la Recherche [LU]

Available on ORBilu :

since 29 December 2022

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