Seminar

Revealed Social Preferences of Dutch Political Parties

Tuesday May 22nd, Egbert Jongen (CPB) will present "Revealed Social Preferences of Dutch Political Parties".

Date
May 22, 2012
Time
00:00
Location
CPB-office, Van Stolkweg 14, The Hague

Time: 2012, Tuesday May 22nd, 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Egbert Jongen (CPB)

Discussant: Paul Tang (Boer & Croon)

Language: English

Registration:  Please register by sending an email to seminars@cpb.nl.

Abstract subject: Since 1986, in a process unique in the world, all major Dutch political parties provide CPB Netherlands Bureau for Economic Policy Analysis (CPB) with their detailed reform proposals for the tax-benefit system for every national election. CPB then calculates and reports the simulated income, budgetary and behavioral effects of these reform packages, which subsequently play an important role in the election campaigns in the run up to the national elections. The detailed reform proposals provide us with a unique opportunity to study the redistributive preferences of political parties. We use the inverse method of optimal tax theory to find the social welfare weights implicit in the reform proposals, combining the reform proposals with micro data on the income distribution and the elasticity of the tax base in the Netherlands. Our main findings are: i) all parties give a higher social weight to the poor than the rich, ii) left-wing parties give a higher social weight to the poor and a lower social weight to the rich than right-wing parties, iii) all parties, including the right-wing parties, give a negative social weight to the rich (all top rates are set beyond the top of the Laffer curve), iv) all parties give a higher weight to middle incomes than low incomes, in particular left-wing parties (there seems to be a bias in redistribution from the poor to the median), and v) the differences between social welfare weights are rather small which may indicate status quo bias or post-election coalition considerations.

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