Scandinavian Working Papers in Economics
Working Paper Series,
Uppsala University, Department of Economics
No 2016:13: Political preferences for redistribution in Sweden
Spencer Bastani () and Jacob Lundberg ()
Additional contact information
Spencer Bastani: Department of Economics and Statistics, Postal: Linnaeus University, Växjö, Sweden
Jacob Lundberg: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Abstract: We examine preferences for redistribution inherent in Swedish tax policy 1971–2012 using the inverse optimal tax approach. The income distribution is carefully characterized with the help of administrative register data and we employ behavioral elasticities reflecting the perceived distortionary effects of taxation. The revealed social welfare weights are high for non-workers, small for low-income earners, and hump-shaped around the median. At the top, they are always negative, especially so during the high-tax years of the 1970s and 80s. The weights on non-workers increased sharply in the 1970s fell drastically in the late 80s/early 90s, and have since then increased.
Keywords: redistribution; social welfare weights; optimal taxation; inverse optimal taxation; social preferences
40 pages, November 7, 2016
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