Conference Agenda

In Germany and several other European countries, taxpayers can deduct commuting expenses between their home and workplace from taxable income. The design of such commuter tax allowances has important implications for redistribution, individual incentives, and environmental outcomes, and remains the subject of ongoing policy debate. Using an experiment with more than 3,000 respondents from a representative sample of the German population, we study how information about the distributive and environmental aspects of the commuter tax allowance affects beliefs and support for alternative reform designs. Participants report beliefs about the current regulation as well as their support for multiple reform options, and are randomly exposed to information on either income-based distributional effects or potential environmental consequences of the current regulation. Providing information on distributional effects substantially reduces perceptions of social fairness of the current system by 22 percentage points and increases support for an income-independent mobility allowance by around 10 percentage points. In contrast, information about environmental implications does not affect policy support.