The Altruistic Rich? Inequality and Other-Regarding Preferences for Redistribution (original) (raw)

Why is the difference in redistribution preferences between the rich and the poor high in some places and low in others? In this paper we argue that it has a lot to do with the rich and very little to do with the poor. We contend that while there is a gen-eral relative income effect on redistribution preferences, the preferences of the rich are highly dependent on the macro-level of inequality. The reason for this effect is not related to immediate tax and transfer considerations but to other-regarding con-cerns. Altruism is an important omitted variable in much of the Political Economy literature. While material self-interest is the base of most approaches to redistribu-tion (first affecting preferences and then politics and policy), there is a paucity of research on other-regarding concerns. Using data for the US from 1978 to 2010, we show that the rich in more unequal states are more supportive of redistribution than the rich in more equal states. In making these distinctions bet...