The Individual Political Economy of Federal Tax Policy

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Abstract
Public policies are the product of conflicting demands within society. These demands are both collective in nature and the product of individual interests. Individuals must balance these conflicting interests in developing their policy preferences. We estimate the role of collective and individual interests in preference formation, using tax policy as a substantive example. Survey data are used to estimate the model for evaluations of several tax policies debated during consideration of the 1978 Tax Revenue Act. Our analysis indicates that individual preferences for tax policies are greatly affected by attitudes towards collective issues—particularly redistribution attitudes—and by self-interest considerations. We also find that aggregate variables measuring individuals' local economies have significant effects on symbolic and self-interest preferences.

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