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Title:(Post-)materialist attitudes and the mix of capital and labour taxation PDF Logo
Authors:König, Tobias
Wagener, Andreas
Issue Date:2008
Series/Report no.:CESifo working paper 2366
Abstract:Social values shape policy outcomes. We examine the role of postmaterialism, a widely used concept in the social sciences, for the mix of capital and labour taxation chosen by a society. Following political scientist Inglehart, we define the degree of postmaterialism as the relative importance which individuals or a society as a whole ascribe to non-material values over material things. We incorporate this notion into a simple tax model for a small open economy. We show that a greater emphasis on immaterial values will lower the ratio of capital to labour taxes. Subsequently, we test our theoretical results empirically, using a panel data set comprising 17 OECD countries over the period 1981-2000. Proxies for the degree of postmaterialism are developed from the World Values Surveys. Their impact on the tax mix is highly significant and goes into the theoretically predicted direction.
Subjects:Culture economics
social values
postmaterialism
taxation
JEL:Z13
E62
H20
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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