Tuesday, March 03, 2009

Tax policy colloquium on Leslie McCall's "Americans' Social Policy Preferences in the Era of Rising Inequality."

Last Thursday, we followed our recent once-a-year tradition of having a paper by a political scientist, in this case Leslie McCall of Northwestern & Princeton concerning American public attitudes towards progressive redistribution. Main takeaways: (1) Americans are more redistributive (and less different in this regard from Europeans) than has widely been thought, (2) in general, concern about income inequality grew in the 1990s with actual inequality, and (3) such concern tended not to produce support for more progressive income tax rates or a larger welfare system because people were skeptical about those two institutions. Instead, it was largely channeled into support for education (believed, perhaps erroneously, to lead towards more equal results) and regulatory issues such as immigation, the minimum wage, and CEO pay.

Generally the story was convincing, although there's only limited data (from large-scale surveys undertaken over the last 20 years). Some of the points we made at the session concerned (a) the difference between addressing the rich and aiding the poor in how people in the middle think about inequality, (b) the importance of whether one's own income is rising or stagnant to how one thinks about those who are getting a lot richer, and (c) the lack of any strong reason for expecting, not withstanding the median voter hypothesis, that our political system will produce increased redistribution even if the median voter wants it.

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