(A)Voiding the Fiscal Contract:
How Tax Noncompliance by the Rich Constrains Redistribution
How does tax cheating by the rich impact redistributive attitudes? International scandals such as the Panama Papers have cast the spotlight on tax noncompliance by the wealthy and raised the profile of such a question. Following the logic of material benefit or that of value-based considerations, perceived noncompliance may either dampen or fuel public demand for redistribution. Employing a survey experiment in Italy and in the US, this study shows that individuals in both countries overestimate the rates of noncompliance by the wealthy. In turn, these perceptions have a strong impact on preference for tax progressivity.
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