Rupert Sausgruber, Axel Sonntag, Jean-Robert Tyran
Sausgruber, R., Sonntag, A., & Tyran, J. R. (2021). Disincentives from redistribution: Evidence on a dividend of democracy. European Economic Review, 103749.
Publication year: 2021
We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a “dividend of democracy” in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.