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Trust in government and its effect on preferences for income redistribution and perceived tax burden

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  • Eiji Yamamura
Abstract
This paper explores how trust in government shared by neighbors is associated with individual preferences for income redistribution and individual perceptions regarding income tax burden. Using individual-level data from Japan, a nation with shared homogenous racial and cultural backgrounds, this paper controls for unobservable heterogeneity among Japan’s population, thus reducing estimation bias. Three measures for trust in government are used: “trust in ministries and government agencies”, “trust in diet members”, and “trust in members of municipal councils”. After controlling for individual characteristics, the key findings are: (1) people are more likely to express preferences for income redistribution when trust in government in their residential area is high; (2) people are more likely to perceive their tax burden as low when trust in government in their residential area is high; and (3) when the sample is divided into people with above average income and those with below average income, these results are only clearly observed for people with above average income and not those with below average income. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Eiji Yamamura, 2014. "Trust in government and its effect on preferences for income redistribution and perceived tax burden," Economics of Governance, Springer, vol. 15(1), pages 71-100, February.
    • Handle: RePEc:spr:ecogov:v:15:y:2014:i:1:p:71-100
    DOI: 10.1007/s10101-013-0134-1
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    More about this item

    Keywords

    Trust in government; Redistribution; Perception of tax; Inequality; D30; D63; H20; Z13;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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