Don’t look down: The poor like taxing the rich less than you would think

Paradoxically, as the share of the population that receives benefits in a given area rises, support for welfare in the area falls. A new NBER paper finds evidence for an even more intriguing and provocative hypothesis. Its authors note that those near but not at the bottom of the income distribution are often deeply ambivalent about greater redistribution.

The hypothesis for the root of this paradox being: people like to be able to see that at least someone is worse of than them. This smells a bit like one of those appealing, intuitive ideas which is only partly, if at all, grounded in fact.

A similarly appealing, intuitive but only partly, if at all, grounded in fact hypothesis is that people don’t like feeling that they are in need of (much) state assistance; that they would rather be able to support themselves; that they don’t want to be seen as scroungers. That certainly appeals to my sense of values, but it’s obvious that my values are not going to be universal.

My feeling is that, like most societal problems, it’s a combination of many factors and the underlying cause is likely to vary subtly person to person.