Applied Economics Lunch Seminar

Du 23/01/2024 de 12:30 à 13:30

R2-21

DE MEULENAER Chloe (LSE)

Family first? Persuasion, polarisation, and the inheritance tax

Despite its redistributive potential and rather widespread support among economists, the inheritance tax regularly proves to be one of the most unpopular taxes. In this project, I explore this unpopularity and the effectiveness of different arguments to move preferences. I run a survey experiment on a sample of the French population and expose respondents to one of two quotes: a Fairness argument, stating that the inherited wealth distribution is starkly unequal, and a Family argument, celebrating the inherent right of parents to transfer the fruit of their hard work to their children. First, I find that self-interest plays a minor role in explaining support for the inheritance tax, and that support is very politically polarised, more so than for other taxes. Second, using text analysis methods on respondents' answers to an open-ended question, I find that the Family argument is way more prevalent in respondents' first thoughts about the tax, and that it gathers more support than the Fairness argument. Third, I find that despite this support, the Family argument does nothing to move preferences of respondents, while the Fairness argument significantly increases support for the tax. That increase is concentrated among left-wing and centre respondents, and especially strong among respondents who mention distributional concerns in their answers to the open-ended question. I suggest that those effects can be explained by a form of saturation of the Family argument; by comparison, the Fairness argument reinforces the support of those who already agree with it, increases the support of those who feel they lack information, without antagonising those who disagree with it. Taken together, these results highlight the importance of distinguishing between arguments that are top-of-mind and those that are persuasive; and that on a heated, polarised topic like that of the inheritance tax, economic arguments may still be more effective than emotional ones.