We examine German individuals’ preferences for income and wealth taxation and, importantly, the interplay between these two tax instruments. Using a large-scale online experiment with 2,702 participants randomly assigned to one of four treatment groups that varied in the type and format of tax preferences elicited, we study how stated tax burdens respond to different conditions. Baseline estimates reveal average (marginal) tax rates of approximately 17.4% (18.9%) for income and 4.1% (2.3%) for wealth, with substantial variation across treatment groups. Although participants associate wealth with an ability-to-pay, they do not disproportionately substitute income tax burdens with wealth tax burdens. We also document a metric effect: Participants state lower tax burdens in absolute values than in percentages, especially for the wealth tax, highlighting unfamiliarity. Informational treatments affect responses unevenly. Benchmarks shift stated tax rates downward, while metric conversion has little impact, likely due to anchoring.

Horizontal inequity occurs when employees and self-employed with the same income end up with different effective tax burdens, due to the difficulty of enforcing taxes on self-employed. Based on detailed micro-tax simulations models integrated with household surveys in 25 developing countries, we find that tax systems incur large horizontal inequities in practice and that reforms which improve vertical equity worsen horizontal equity by the same amount. An in-person survey in Pakistan and online surveys across multiple countries reveal widespread concern about horizontal equity. Randomized information treatments heighten the concern but do not shift tax preferences over horizontal versus vertical equity.

We conducted an online survey experiment in Lima to study how perceptions of social class shape support for economic redistribution. Participants were randomly informed about either their actual socio-economic status (SES) or the true share of affluent households in their district. Respondents substantially overestimated their own SES and, to a lesser extent, the prevalence of affluent households. Correcting these misperceptions generally increased support for redistribution, with no effect on a wealth-tax proposal. Effects were especially strong when respondents had misjudged their SES by two or more levels: even those predisposed against redistribution (e.g., right-leaning, individualistic, or sceptical of government) increased their support. Similar patterns also emerged when correcting beliefs about the local distribution of SES.

Economists design schemes to finance environmental policies based on efficiency, but voters, whose support determines the feasibility of such schemes, hold beliefs about efficiency and fairness that often collide with economic theory. We design a large-scale information experiment to assess a representative population’s beliefs about alternative financing schemes. Informed consumers support a CO2 tax after learning the rich pollute more, but oppose it and do not oppose government deficits when learning older people also pollute more. When learning that certain groups, due to luck, gain from climate change, consumers oppose redistribution from gainers to losers. Everybody despises market solutions such as private insurance. Consumers’ beliefs could lead to inefficient schemes to finance environmental policies but communication can manage consumers’ beliefs about the desirability of alternative schemes.